Buy-to-let properties with poor EPC ratings are being shunned by private landlords according to a survey.
Research by Shawbrook Bank indicates the government’s proposed changes to the Minimum Energy Efficiency Standard are already impacting buying preferences amongst landlords.
It found a quarter of the 1,000 landlords surveyed would avoid buying properties with a low EPC rating and 15% would only buy something built in the last 20 years.
In 2020 the government proposed the changes stating landlords may need to reach a rating of C or above by 2025 for all newly rented homes and by 2028 for all rental homes.
In the survey nearly a third of buy to let investors said they would buy a property which already had a C rating or above. A further 24% said they were more likely to prioritise a property if it had the potential to reach a C or above.
A large proportion of the housing stock across the UK was built before 1940 and so unlikely to be rated C or above. Landlords estimate it could cost them an average of £5,900 to make the necessary improvements.
Landlords are facing additional pressures from tenants who are becoming more vocal in their demands for homes to be more energy efficient. More than a quarter of landlords in the survey said tenants had complained at least once about their home’s EPC rating with a further 16% saying they had received multiple complaints.
Sheldon Bosley Knight’s business development manager Nik Kyriacou said: “We know what a tough time it is for landlords at the moment and these extra costs are unwelcome.
“However, we would urge them not to panic about the possible changes and instead think of any energy saving improvements as a longer term investment.
“We also know the building programme currently underway in the Warwick, Leamington and Stratford areas offers great opportunities for landlords looking to increase their portfolios as these new homes have better EPCs than older ones.
“At Sheldon Bosley Knight we can offer expert advice to both new and existing landlords on where to spend their money so they get the best return on their investments.”