A warning has been issued that lettings agencies could lose millions of pounds if landlords quit over new EPC targets.
Reapit analysed some 52,000 private rental properties in England, Scotland and Wales and claims that as a result of the Labour government’s energy efficiency targets 880,000 current rental properties could be lost to the sector if landlords quit rather than upgrade to an EPC rating C or above.
The PropTech firm calculates 2.7m rental properties across Great Britain will need to be retrofitted with some form of energy efficiency measure, to hit new targets by 2030.
However, if landlords of 800,000 properties instead choose to sell with an EPC rating of E, F, or G, the sector could lose over 17% of its current stock.
The cost of retrofitting all PRS properties in England, Wales and Scotland rated below an EPC C rating to a C is estimated at £24.03 billion.
The average cost of retrofitting per landlord is £10,442, but upgrade costs will not be shared equally across all landlords as some will have older and less energy-efficient stock than others.
Reapit says that at worst, the retrofitting costs per property for those with an EPC rating E, F and G could exceed £14,000 per property, based on costs estimated in the latest English Housing Survey, adjusted for inflation.
The company says what government support exists in the form of interest-free loans and grants should be reviewed and improved. Mortgage lenders should also be encouraged to provide discounts for energy-efficient homes and favourably adjust mortgage rates if a landlord is taking equity out of a property to fund energy efficiency upgrades.
If this isn’t forthcoming and 17% of current stock is lost to the sector, agents could in turn lose over £229m in fully managed and let-only fees a year.
The new EPC target was confirmed by Energy Secretary Ed Miliband last month a similar policy was put forward by the previous Tory government but dropped in 2023.
“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” says Steve Richmond, general manager UK&I at Reapit.
