EPC changes need addressing now to protect value

Less than a third of landlords are looking to make energy saving measures to their properties over the next 12 months, according to research undertaken by Handelsbanken . With the 2025 deadline for EPCs to be minimum Band C for rental properties approaching, and a cost of living crisis in the meantime, #landlords could be sleepwalking into a crisis of their own which could severely impact rental income and in turn, value.

The Government seem to be trying to tackle the issue, by investing an extra ￡6bn in energy efficiency of homes by 2025 - the date of the #EPC reform. We do not yet know in what form this will take, but with an estimated 8.7 million homes in the UK considered to be rental properties (source: Octane Capital ) and over 50% of all existing residential property stock being below the important C rating (source: Ministry of Housing, Communities and Local Government - Legacy ) the fund is likely to help but not completely alleviate the financial burden on landlords.

There is a strong likelihood that many of those 'accidental landlords' may decide to exit the market rather than paying the additional amount to improve the energy efficiency of their stock, forcing further pressure on limited supply and in turn, increasing rental levels still higher. The Government must flesh out the detail of the intended changes to enable time for those landlords that do plan to remain in the market, to enact the changes before the deadline.

As #valuers we have a duty to inform investment lenders to raise these issues with their clients now, to avoid a detrimental impact on the values of their investment portfolios in the lead up to the deadline.