Figures from RightMove have revealed that millions of rental properties will need £23.4billion spent on them to meet the government’s Energy Performance Certificate (EPC) target in 2030.
The data estimates that around £8,074 will be needed per property for a landlord to improve their energy ratings. But concerns have been raised that without financial help to boost the upgrades, the 2023 target could see a reduction in available rental properties – if landlords decide to sell up rather than make changes.
Rightmove also surveyed over 14,000 home-owners and renters, along with over 1,000 landlords for the report to find out how they feel about the findings.
The survey found that while half (50%) of landlords are concerned that the government will introduce costly charges for not meeting EPC requirements, one in five (19%) renters think stricter energy efficiency regulations should be the top priority for the new government.
And concerningly, it appears that landlords are already looking to sell-up as Rightmove revealed that the proportion of former rental properties moving into the sales market is already at its highest point on record. 18% of properties for sale in August were previously on the rental market, compared with 8% in 2010.
Energy bills
With the recent energy price cap rise, household bills are expected to increase by 10% on average this winter, making energy-efficient homes ever more crucial as people strive to cut living costs.
92% of renters say it is crucial to understand the energy efficiency of their home, compared to 87% of homeowners, showing the growing importance of increasing costs and energy bills in rental properties.
There is also a willingness from people to change their behaviour. The majority (72%) of people would be willing to change how and when they use energy if it meant they could access cheaper energy rates at different times of the day.
Rightmove’s Energy Bills Tracker shows that the difference in bills between homes with higher and lower energy efficiency ratings can be significant.
The average energy bill for a three-bedroom semi-detached house with an EPC rating of F stands at £4,312 per year, compared with £1,681 for the same house with an EPC rating of C – a difference of £2,631.
Government plans
Labour’s Warmer Homes plan proposes to invest £6.6 billion to upgrade homes with better insulation and low-carbon heating like heat pumps, an encouraging ambition to improve Great Britain’s homes.
While any new policies or schemes would need to be carefully thought through, RightMove says there are a few things that the government could consider to help to make homes greener:
- Design a package of support for home-owners and landlords across the mass market (properties under £400,000) to make green upgrades, through grants or low-interest, long-term loans:
- One potential consideration could be to allow landlords to offset the costs of energy efficiency improvements against income tax in the year the costs are incurred rather than against capital gains tax when the property is sold
- Introduce stamp duty rebates if a new buyer makes green improvements in the first few years of purchase. We suggested this change last year and still think it could be successful in helping motivate people to make changes
- Encourage mortgage lenders to continue investing in innovation in the green mortgages space, so that new products and awareness of them generates wider mass appeal
Tim Bannister, Rightmove’s Director of Property Science, says:
“It’s clear from our analysis that more needs to be done to help the mass market transition to greener homes, especially those living in homes worth under £400,000.
“In the rental market, through discussions with agents and our research, we know landlords want to provide comfortable, energy-efficient homes, but green upgrades can be costly. For landlords of lower-value properties, the financial returns may not always justify the investment.
“Now that the government has confirmed there will be a consultation on raising the minimum energy efficiency standards in rental homes, we look forward to seeing much needed clarity, and ideally support, for landlords, which in turn should benefit tenants over the medium to long term.”
Johan Svanstrom, Rightmove’s CEO, adds:
“Our Greener Homes Report this year highlights the barriers that remain in the journey to greener homes, from the financial challenges, to the need for clearer guidance on what support is available. It’s clear to us that consumers’ interest in greener options continue to steadily rise.
“At Rightmove, we’ve been increasing our efforts to better educate homeowners, renters, and landlords about the cost and environmental benefits of more energy-efficient homes.
“By leveraging our extensive data, covering the entire property market across Great Britain, we will continue to support people in making more informed choices and equip the industry with the latest insights into home-mover behaviour”.
What is an EPC Rating
An EPC (energy performance certificate) rating will tell you how energy efficient a building is. EPCs rate a home from A (very efficient) to G (inefficient).
They’ll tell you how costly it will be to heat and light your property, and what its CO2 emissions are likely to be. An EPC will also give you recommendations on how to improve your energy efficiency.
How to check EPC rating
To check your EPC rating, visit the government website. An EPC is valid for 10 years, but it will only need to be updated if you are planning on selling or renting out your property.
However, it may also be beneficial to get an updated certificate if you have had work done on your property to improve its EPC rating – for example, installing insulation or replacing windows.
How to get a new EPC
If your EPC is out of date and you are looking to sell or rent out your property, you will need to get the property reassessed. If you sell or rent and do not provide a valid EPC, you could be fined up to £500. Follow these steps to get your property reassessed.
- Check if your property requires an EPC by law.
- Find an accredited EPC assessor. You can find a list of accredited assessors on the government’s website or by searching online directories.
- Schedule a time to have your property assessed.
- Let the EPC assessor inspect your property.
- Pay the EPC assessor.
- Wait for your EPC to arrive in the post.
How to improve my EPC rating?
Your EPC will give you tips on how to improve your rating. This may include getting cavity wall insulation, double glazed windows or installing underfloor heating.
An improved EPC rating can help you save money on energy bills and also improve the value of the property if you are looking to sell.
What is the minimum EPC rating for a rented property?
Properties can be let if they have an energy rating from A to E.
Further reading
Sales – Oakwood Property Solicitors
WHAT TO DO NEXT
To make a start on the next step in your property journey, get in touch today to book a consultation with a member of our team. Call us on 0113 218 5727 to find out how we can help you.
