A staggering £24 billion price tag looms over UK landlords as they face the challenge of upgrading rental properties to meet new energy efficiency standards by 2030. Research from property technology provider Reapit reveals that approximately 2.7 million rental properties across Great Britain will require retrofitting to achieve the government’s new Energy Performance Certificate (EPC) targets.
The cost of going green
Reapit’s analysis of a representative sample of rental properties managed through its platform indicates that landlords could be looking at an average expenditure of over £10,000 per property. Steve Richmond, General Manager UK&I at Reapit, commented on the findings:
“Our report reveals the sheer scale of the work ahead. While we all recognise the need to address the greenhouse gas emissions from housing in the UK, this cannot come at the cost of people’s homes.”
The new EPC landscape
Ed Miliband, Secretary of State for Energy Security and Net Zero, announced in parliament that the government will “demand that landlords raise the standard of their accommodation to a proper energy performance certificate standard C by 2030.”
This announcement follows the previous government’s decision to drop a similar policy in 2023, which included various exemptions and cost caps. The current proposal lacks detail on such measures, leaving many landlords uncertain about their obligations and potential support.
A survey conducted for Energy UK highlighted that 35% of respondents did not make any energy efficiency improvements in 2023 due to financial constraints. This underscores the importance of support mechanisms to encourage landlords to undertake the necessary retrofitting.
Agents as crucial intermediaries
Neil Cobbold, Commercial Director of Reapit & PayProp, emphasised the role of property agents in this transition:
“If landlords do sell stock rather than retrofit, encouraging them to reinvest in the PRS will be critical. Sales and letting agents will be best placed to advise on the investment conditions and regulations impacting the sector.”
Cobbold also pointed out potential opportunities for agents: “There are also opportunities for agents to build profitable relationships with reliable local tradespeople who can help landlords retrofit properties. Minimising the void time will be crucial for landlord profitability.”
As the industry grapples with these new requirements, collaboration between agents, landlords, tenants, and policymakers will be essential. Richmond stressed the need for clarity from the government:
“Critical for tenants, landlords and agents alike will be clarity from the government on what funding and measures will be available to make the PRS EPC C 2030 target a reality.”
With the clock ticking towards the 2030 deadline, the property sector faces a monumental task of retrofitting 2.7 million homes, many of which will be occupied by tenants. The coming months will be crucial in determining how this ambitious target can be achieved without causing significant disruption to the rental market.
