As the UK rental market prepares for stricter energy efficiency requirements, landlords are increasingly concerned about the costs of compliance. Labour’s proposed targets would require all rented properties to achieve a minimum EPC rating of ‘C’ by 2030. While these ambitious goals raise legitimate worries, recent research highlights a more optimistic reality: 26% of properties currently below a ‘C’ rating can achieve compliance with basic, low-cost improvements.
For landlords, this statistic represents a significant opportunity to upgrade their portfolios efficiently and affordably, ensuring compliance without the need for extensive renovations.
A case study research project was recently undertaken analysing rental properties in the city of Swansea, analysing EPC data to model the impact of landlords undertaking low-cost, unintrusive improvements.
Small Improvements, Big Gains
The EPC points system evaluates properties across various categories, including insulation, heating systems, and energy-saving measures. The research found that over a quarter of properties rated ‘D’ or ‘E’ can meet the ‘C’ threshold by implementing simple changes, such as:
- Installing or upgrading loft insulation.
- Improving heating controls.
- Accurately dating extensions and loft conversions.
- Removing decorative secondary heating.
- Switching to energy-efficient lightbulbs.
These straightforward measures often have an immediate impact on a property’s energy efficiency score, helping landlords comply with future regulations while simultaneously lowering energy bills for tenants.
The Awareness Gap
Despite these opportunities, many landlords remain unaware of how close their properties are to achieving an EPC ‘C’ rating. Misunderstandings about the EPC points system and fears of high upgrade costs discourage action. Some believe significant overhauls, such as solar panels or heat pumps, are necessary to meet compliance, but for many properties, basic upgrades suffice.
This lack of awareness can lead to hesitation, leaving landlords vulnerable to future penalties if they fail to act ahead of Labour’s proposed 2030 deadline.
A Financial Opportunity
For proactive landlords, improving energy efficiency is not just about compliance; it also enhances the marketability of their properties. Energy-efficient homes attract eco-conscious tenants, who are increasingly prioritising lower utility bills and a reduced environmental footprint.
In addition to boosting tenant demand, these upgrades can result in higher rents and lower void periods. For those properties requiring additional measures, such as wall insulation, financial incentives such as the ECO4 scheme and other local authority grants further reduce the cost of implementing energy-saving measures, making compliance even more accessible.
Acting Ahead of 2030
Although 2030 may seem far away, landlords are advised to act sooner rather than later. With the rental market already under scrutiny, delaying improvements could result in rushed decisions and higher costs closer to the deadline. An EPC reassessment following basic upgrades is an excellent starting point to identify areas of improvement and unlock the benefits of compliance.
The finding that 26% of properties can meet EPC ‘C’ with minimal upgrades should be a call to action. Landlords who invest early can protect their investments, avoid penalties, and stay ahead of future legislative changes.
Conclusion
Achieving an EPC ‘C’ rating need not be daunting or prohibitively expensive. For over a quarter of properties, the solution lies in affordable, straightforward improvements that yield long-term benefits for both landlords and tenants. By embracing these opportunities, landlords can ensure compliance with Labour’s 2030 targets while enhancing their properties’ financial and environmental value.