80% of landlords ‘were ready for EPC changes’ scrapped by Rishi Sunak this week

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emma shawbrook cox epcs

Rishi Sunak’s decision to scrap tougher EPC rules for rented properties may spark anger among some landlords following new research that four in five of them had already made preparations to meet the former minimum ‘Band C’ requirement.

Lender Shawbrook spoke to over 1,000 landlords and found that 80% said they were already prepared for the 2025 EPC regulation deadline and of these,  30% said their properties already have an EPC rating of A-C, while half said they had plans in place to improve their EPC rating before 2025 when all new tenancies were due to be included in the new regulations.

U-turn

Some landlords may view this week’s U-turn as a waste of their money – Shawbrook found that nearly half of the landlords it quizzed had spent between £500 and £20,000 on improving or investing in their properties over the past year, spending on average some £25,000 across the UK and £37,000 in London.

The now scrapped EPC proposals had also prompted many landlords to be more energy conscious when investing in new property, with over a quarter prioritising buying newer, more energy efficient properties during the next six months.

“Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties,” says Emma Cox (main picture), Managing Director of Real Estate at Shawbrook Bank.

“But while policies shift, climate change is going nowhere, and energy efficient buildings will remain central to net zero plans.

“Rules might not be changing as soon as 2025, but professional landlords with modern, energy efficient stock will be in the best position to attract tenants, as well as reduce potential voids, and importantly, be prepared for future legislative change.”

49 COMMENTS

    • Yep its utter pap. I’m sure they make this stuff up. If they said 80% of landlords are sellling up and renters will be out on there ear due to over regulation claptrap. Or 80% of Landlords have lost the will to live. Or 80% cant find a decent builder to do this stuff. Or 80% dont have the 20k in money to save £20 a year in heating bills because the politicians don’t understand cost benefit analysis.
      The argument of tenants will have to pay more in heating bills is BS as RENTS WOULD HAVE TO GO UP TO COVER THE OVERPRICED COST OF UPGRADES!!! As the typical saving is a lot less than the upgrade spend …………………………………………….even Sunak understood that!!!!

  1. I wasn’t asked. For all we know they’ve asked a small self selecting group and extrapolated. All the landlords I know have been waiting for the final decision on the EPC level, the maximum amount they are required to spend and the requirements to meet those levels. And then if it’s too high, getting section 21s sent out, the tenants evicted and then selling up to invest elsewhere.

    Who’d be crazy enough to spend £25k upgrading, unless the property was bought as a wreck at auction and needed stripping out and completely renovated?

  2. I don’t know and landlords who were ready. Most of the houses in my area are of stone solid walled construction. Very difficult and expensive to insulate. Rents are low. If the EPC requirement came in most landlords would sell up

  3. Well I certainly didn’t prepare for it. I was waiting for the final decision and was going to decide whether to sell up at that point. Thinking about getting out of lettings as legislation etc. is making it unattractive.

    • Same here exactly! It has however saved a bunch of renters from pointless rent rises to cover the cost, inconvenience.
      The truth is ……the market will dictate if tenants get a better deal on on a band E house EVEN THOUGH IT hasnt had 10s of thousands of pounds upgrades and lower than a band C that they will save £20 in heating costs a year ………………Its the renters choice……………My bet is they would prefer the lower cost over all whichever is substantially cheaper……………………tip its the first one all day every day:) But that should be down to personal choice and market forces not dictated by a bunch of know nothing numpties:)

      • I completely agree with you. Better to be in E house than no house at all, or B&B with your stuff in storage, or having to uproot maybe hundreds of miles away.

  4. Same here exactly! It has however saved a bunch of renters from pointless rent rises to cover the cost, inconvenience.
    The truth is ……the market will dictate if tenants get a better deal on on a band E house EVEN THOUGH IT hasnt had 10s of thousands of pounds upgrades and lower than a band C that they will save £20 in heating costs a year ………………Its the renters choice……………My bet is they would prefer the lower cost over all whichever is substantially cheaper……………………tip its the first one all day every day:) But that should be down to personal choice and market forces not dictated by a bunch of know nothing numpties:)

  5. Well I prepared and spent a small fortune and now feel the reward is a lot of sunk cost. I feel like a total mug.

    Sweet words from the host about being a better choice for tenants but EPC in my experience is well down the list of “would like to haves” and probably isn’t even noticed by most tenants whose concern is rent size location etc.

    Chopping and changing by Govt makes people impacted feel ripped off.

  6. No, don’t think so. These EPC evaluations are also so much a matter of opinion that it makes it rather difficult to know whether to bother or not.
    I had to renew the EPC on one of my properties recently. Previously it was deemed to be D and now it is E. The only changes were two new uPVC doors, back and front, to replace the old wooden ones that had seen better days. The evaluation was by the same assessor too.

    I considered challenging it but then thought….what’s the point. It is all nonsense anyway. And now, with Rishi’s about-face, irrelevant nonsense too.

    • Yes, there’s a bit of irony in the sense that these so-called evaluations aren’t exactly the most scientific processes in the world. I wonder who assesses the assessors.

  7. The biggest problem was not improving the energy efficiency – decent LLs are always improving their properties – but the fact that the EPC algorithm was a flawed metric.

    I am sure this will come back at some point in the future, I just hope when it does the EPC is a true measure of energy efficiency not the poorly applied metric of cost it is now.

  8. I spent money preparing for this, fortunately it was only the cost of some LED bulbs and the re-assessment of my two properties, both of which were increased from D to C, so no further spend would have been required.

    All this shows is that EPC is a joke and is not fit to be used for policy making!

  9. “Rules might not be changing as soon as 2025, but professional landlords with modern, energy efficient stock will be in the best position to attract tenants, as well as reduce potential voids, and importantly, be prepared for future legislative change.” Sounds like the type of thing a bank would say. And do you think the err ‘less fortunate’ will be able to afford these modern, energy-efficient stock then love?

  10. We’ve just sold a flat and the buyer insisted we upgrade to EPC C before they proceeded. Fortunately all we had to do was instal a timer on the combi boiler. Total cost £120. I guess we were lucky here but If we’d have had to spend much more I’d be mighty cheesed off with this new government ruling.

  11. I’ve got to say that I didn’t bother too much with the threat of these EPC changes as the whole thing just seemed to be so unrealistic and unworkable. I don’t know which planet some of these people are on. It’s a good job that Rishi injected a bit of much-needed common sense (my dad used to say that the problem with common sense is that it’s not very common).

  12. I am one of those “80% “landlords who are selling up now. I don’t have the money to pay for rising interest rates and ludicrous remortgage fees, which can no longer be offset by rents increases which tenants can’t afford (and then how to get them out if s 21 goes?), or mortgage relief. So how would EPC refits with unknown benefit, results and huge costs, even feature in my calculations. I increased my rents in April, but I could easily increase them again by the same amount 6 months on just to keep up with market rates. Delaying EPC will not make a bit of difference to the amount of landlords leaving. Anyway, I don’t see how gas or gas boilers will ever be repealed before 2050 as there is too much reliance on it at an industrial level alone.

  13. The “new EPC rules” had not even been finalised. The bill was still making it way through, any EPC rule changes would have most likely have been altered before being implemented. Anyone making considerable changes, before a final decision, was jumping the gun in my opinion. 80% of landlords being ready sounds like a very high and unlikely figure.

    • Who would spend money without knowing what the epc was going to be changed to? We have flats that can’t be changed in any way as they’re listed.

  14. We certainly wasn’t! 3 needed upgrades. One suggested solar but the roof got no sun. Another was a new build and listed so we couldn’t charge anything. No advise on what that would mean. Now we don’t have to pay anything

  15. Tbh I am not surprised in any shape or form that this worse than useless administration has u turned on the EPC proposals.

    Whether it went ahead or does so in the future is of no concern to me now. I have already sold one of my BTL and invested elsewhere. The rest will follow as tenants vacate.

    This lot are clueless on PRS or they have another agenda which doesn’t include LL who have only a few properties.

    In the meanwhile they have created chaos, frustration and general had enough attitudes in the market. It has/will lead to fewer properties to let, higher rents & difficulties for tenants. Great result eh Sunak et al.

  16. All of the comments above also apply to me. I have single solid brick walls, no cavities to be able to fill! My houses were rewired plumbed and plastered 20 years ago when we invested for our future, instead of in a pension. I have been waiting for the legislation to become law, before spending thousands on outside cladding or evicting everyone, to do it on the insides of the rooms in my HMOs. All other improvements have been done but still only achieve EPC at E because we don’t have GAS !! We are heated by electric. At the time 20 years ago, it seemed the way to go, and it still is except EPCs haven’t been fit for purpose! I have spent the last couple of years worried sick and struggling to see how I keep my business without selling up. I am relieved that I can now plod on, refurbishing things as and when it’s needed, and between tenants, as I have always done.
    I do not usually raise rents unless I’ve refurbished and have tenants that are with me long term.
    I have a small block of 5 flats that are for sale, EPCs E & D. These I am selling as they are in a building that needs a total refurb that’s too big for me to handle now my husband has passed on. I will buy something else, but it will have to have a C for me to consider it now.

  17. What an appalling article! Complete nonsense. No way that 80% of landlords had made preparations, and please explain to me how, if landlords have spent between £500 and £20,000, the average spend can be £25,000? Basic mathematics failure here! Landordzone you need to find facts, not fake news.

  18. Unbelievable article. No way were 80% of the total number of England’s landlords able to comply with C ratings on all their properties, so they can’t have picked a representative sample.
    Let’s give Sunak some credit here. It took political courage to do the right thing here. He reversed the policy, he wasn’t the one who introduced it. It was an insane policy.

    • I agree. Sunak deserves credit for this decision. It has saved thousands of tenants from being evicted or their rents going up again to cover the costs of £10k refurbs.

  19. The whole EPC debacle is irrelevant.

    LL should still sell up due to all the other anti-LL polices starting with S24.

    The very real prospect of the Labour Perty Renters Charter is what should be scaring the pants off LL.

    The Tory RRB compared to the RC is relatively benign even though it is still awful.

    Forget worrying about EPC just sell up or change business model from long-term lettings.

    But even attempting that looks like it is to be clamped down on in England.

    STL is under attack in Scotland and Wales where ridiculous policies gave been introduced.

    Labour in England have I believe announced they wi be changing STL taxation regulations.

    So the STL avenues will be effectively closed off to LL attempting to escape long-term letting.

    It makes far more sense to sell up and see what happens in the first 100 days of a Labour Govt.

    Stick the sale proceeds in a cash ISA etc and watch the way the PRS goes.

    I predict many more LL bailing.

    It makes no financial sense to retain lower quality which would be prone to damp and mould due the lower class of tenant refusing to heat abd ventilate.

    Just sell off to mug FTB who won’t be interested in EPC status and who will bother to heat and ventilate.

    It makes perfect sense for LL to offload all their dud Sub-EPC C status properties to homeowners.

    Nobody cares about tenants.

    Govt just wants owner occupiers.

    That makes perfect political sense.

    There are about 2.9 mullion letting properties that aren’t currently EPC C status.

    Unless a LL has a sufficiently long investment timeline then for most LL it isn’t worth investing in C status improvements.

    Selling makes far more sense.

    The threat of the Labour RC is the icing on the cake of all threats to LL.

    Can you imagine tenants having the right to carry out improvements at your letting property as that is one of the dopey Labour proposals

    That just shows you how stupid Labour are.

    You really DONT want to be a LL when Labour assume power.

    I reckon when Labour produce their manifesto many LL will take fright and put their properties up for sale.

    I was ready to auction all my properties had idiot Corbyn got in.

    He had a RTB process which would have required me to provide a deposit to enable tenants to buy my properties!!!!!!!!!!!!!!!!!!!!!!

    No way was that gonna happen.

    Fortunately Corbyn lost but only be about 2500 votes in marginal seats.

    That Labour bullet was swerved.

    Don’t believe this will happen again.

    The Tories are doomed and Labour will be attacking LL far more than the Tories ever have!!

    Staying in the PRS is a massive gamble; not one that I was prepared to take which is why I’m now all sold up.

    Long-term letting is a mugs game in England.

    It is disastrous in Scotland and Wales.

    High interest savings accounts are a far better option then the PRS.

      • Even 2% a year would be better than money tied up an asset you have less and less control over, that needs more and more investment and that’s not even getting onto the topic of rogue tenants.

        Stick it in some trackers and funds. It’s a bad day for UK PLC when it is better for us to do that than rent out houses.

  20. I must admit I did think it would all get delayed although we have been working flat out to try to boost ratings.

    Allour boilers are condensing all storage rads high heat retention all flat roofs now to modern insulation standards all lighting low energy but despite all of that there is still a long way to go to achieve grade C across the board. It is probably theoretically possible, just about, but will they then wallop gas in a bad attempt to promote heat pumps. They are a non runner as single systems in flats in most blocks due to the distance required from the condenser to the next flat

  21. Anyone that couldn’t afford it now have a breathing space, for anyone that have done the work great your improvements are not wasted.
    The delay gives the big boys time to catch up they are not ready yet with their multi story Blocks of Flats to take over your Business.
    The real issue is THE RENTERS REFORM BILL, not the EPC’s it doesn’t matter a carrot to you what the EPC is when you have lost all control and make no mistake that’s what it is, let them freeze.

  22. I don’t believe this for an instant. Some 60% of rental properties are band d or below.

    Government finally rubbed one of the few remaining brain cells and realised 80% of rental properties at D and below would NOT be ready and landlords would sell up.

    This article is back to front.

    • DONT be ridiculous!

      2.9 million letting properties are currently sub-EPC C status.

      That is more 8%.

      No way will LL of these properties bother improving to C status.

      LL will still be selling of these properties.

      They just now have a longer period to sell up up.

      One property per tax year.

      Moat LL will be all sold up when C status is required.

      Many LL were considering a fire sale before the C status was required.

      LL now have more time to effectively sell off all the dud properties.

      LL will not bother spending tens of thousands on C status.

  23. The other thing that no one has mentioned as yet is how impotent this makes Gove look. Totally undermined all the shit he’s been spouting for the past god knows how long. Hopefully he’ll crawl back under the rock from whence he came…. and get his teeth sorted.

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