Buy-to-let (BTL) lenders are looking to futureproof their mortgage portfolios by reassessing how they lend against properties with lower energy efficiency, according to a new report from Cotality.

Government legislation is set to enforce a minimum energy performance certificate (EPC) rating of band C on all properties starting a new private rental tenancy agreement from 2028, and for all private rented homes from 2030.

If these deadlines go ahead, it means landlords now seeking a five-year fixed rate BTL mortgage secured against a property with an EPC rating below band C could be refused a mortgage before these net-zero deadlines hit.

This is because a new tenancy agreement could commence after the 2028 deadline but within the five-year mortgage deal term – which Cotality has warned could potentially leave lenders exposed to regulatory risk.

Chief operating officer at Cotality UK, Mark Blackwell, said: “There is a clear desire in lenders to act to mitigate the impact of climate change, starting with the climate risk sitting on their own loan books.

“There’s an imminent regulatory deadline that requires them to do it, but during our research we found that without more robust data inputs and better access to model scenarios, many aren’t as far on as they want to be.”

The property data insights firm’s new report, titled Temperature Check 2025: How prepared are buy-to-let lenders for future property risk?, has suggested that many lenders are already considering how these net-zero deadlines affect what properties they lend against.

Cotality found evidence that some BTL lenders are currently laying the groundwork to ensure they limit their own exposure to “net-zero risk” when approving new loans. It also suggested other lenders are planning to integrate with more “dynamic data sources” for new BTL financing to help modernise how they assess property-level environmental risks and energy performance.

However, the report also suggested that some lenders have not yet fully worked out how net-zero deadlines will affect their future lending appetites. Cotality also warned that a significant proportion of BTL lenders admitted their access to this type of data was still too “patchy” to allow them to make well-informed enough decisions ahead of the regulatory deadline.

“There are ways to address this [deadline], and our research highlighted that lenders are taking a wide range of approaches,” Blackwell added.

“What was common to all though, is that meeting the challenge of net-zero is not straightforward, and it will require the co-operation of all parts of the market to achieve it in such a short time.”

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