More than seven in 10 landlords (71%) would say they are unlikely to buy a property which has an energy performance certificate (EPC) rating of less than C, new research from Foundation Home Loans has indicated.

Asked to what extent the EPC rating of a property now impacted on their purchasing decision, most respondents said they were increasingly unlikely to purchase a rental property if it wasn’t already at a C level – which is likely to be the future minimum standard.

The research, comprised of 983 online interviews with landlords, was undertaken on behalf of Foundation by BVA BDRC, between the first three weeks of July this year.

Foundation found that the more properties the landlord had within their portfolio, the less likely they were to buy below C. This was suggested by 74% of those with six to 10 and 11 to 19 properties, and by 78% of those with over 20 properties. Just 18% of landlords said the EPC level would make no difference.

Landlords also had a strong awareness of the likelihood of future legislation around a minimum EPC level of C being introduced for all private rental sector (PRS) properties. Seven in 10 respondents (71%) said they were aware and fully understood the details, while 24% were aware but did not understand the details, and just 4% had no awareness.

Director of sales at Foundation Home Loans, Grant Hendry, said: “While we still might be waiting for certainty and clarity over when the Government is likely to introduce its minimum EPC Level legislation for the private rental sector, it’s clear from this research that landlords are aware of what is likely to be coming, and are thinking seriously about their existing portfolios, how they might fund improvements, and what their plans might be when this is introduced.”

Given that, according to the research, the average landlord has 3.3 properties with an EPC rating of D or below, and with this rising to 9.5 for landlords with more than 11 properties, Foundation suggested it was not surprising to see strong awareness of future minimum EPC standards for PRS properties and landlords being less inclined to add properties rated below C to their portfolios.

Hendry added: “Overall, it seems clear this will remain a major focus within the PRS for years to come, and from an advisory point of view, it is clearly worthwhile having these conversations with landlords immediately, particularly for those at the point of refinance, as they might want to take advantage of this opportunity in order to secure the funding they require for the works.

“As it stands, it appears we are looking at either a 2025 or 2028 implementation date, and clearly the former will be with us before we know it. It therefore makes sense to be exploring options with every landlord client, outlining what is likely to be coming, and working on those financial arrangements with specialist lenders like ourselves, in order that they can keep invested and meet the standards going forward.”

Share Story: