Letting agencies risk losing millions if EPC changes are poorly managed
Experts from Reapit discovered over 880,000 private rented sector (PRS) properties could be lost due to new EPC targets if landlords chose to sell rather than upgrade them.
In July, Ed Miliband, secretary of state for energy security and net zero, announced landlords will be required to ‘raise the standard of their accommodation to a proper energy performance certificate standard C by 2030.’ Following the news, Reapit, a leading property technology provider, reviewed a representative sample of rental properties to see how many currently fall below a C rating.
Researchers discovered 2.7 million homes across Britain will need to be retrofitted with some form of energy efficient measure to hit government targets by 2030.
However, since the announcement a number of landlords have expressed interest in selling their properties rather than paying for upgrades. According to estimates from the 2021-22 English Housing Survey, the retrofitting costs for a property with an EPC rating of E or below could exceed £14,000.
Despite this, Reapit found that if landlords do sell their properties with a low EPC ratings the sector could lose 17% of its stock – estate agents could lose over £229m in fully-managed and let-only fees per year.
‘Our report reveals the sheer scale of the work ahead,’ said Steve Richmond, general manager at UK and Ireland Reapit. ‘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.’
Richmond added: ‘Bringing forward proposals that require such a high spend without outlining the support measures on offer to achieve these ambitious targets risks spooking landlords, so urgent clarity is needed. The last thing tenants need is more landlords selling up. Not only will it push up rental prices, but tenants will face the stress and upheaval of moving.’
The latest findings from a PayProp survey show half of tenant moves last year were as a result of landlords selling, while a mere 4.1% of them planned to purchase more homes.
‘Anything that accelerates this trend will only harm tenants,’ explained Neil Cobbold, commercial director of Reapit and PayProp.
‘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 industry trends and regulations impacting the sector.’
To see the energy performance of the private rented sector in England, Wales and Scotland – download the Reapit special report.
Image: Yaopey Yong
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