REVEALED: Is it worth upgrading rental properties to meet new EPC rules?

Landlords updating their properties to meet imminent Energy Performance Certificate (EPC) changes could make more in lifetime energy savings than they pay out for green improvements – but a significant number might end up out of pocket.

Analysis by Propflo, a decarbonisation platform for lenders, predicts that those who need to spend an average of £4,001 will end up saving £7,691 over the life of technology such as solar panels which typically last 25 years.

But those forking out an average of £9,121 would only save £8,015.

Founder and CEO Luke Loveridge (pictured) tells LandlordZONE that it hasn’t included factors such as mortgage savings, tax relief or grants which would be more specific to each landlord.

“If you include these benefits for both the £5,000 to £7,499, and £7,500 to £10,000 bands, they will likely mean landlords won’t be materially out of pocket. If they just do the minimum retrofit for £10,000, then they just might be left out of pocket.”

Increased rents

Loveridge adds: “Tenants typically directly benefit from energy savings, so landlords may realise this value through increased rents and/or increased/defended property value instead.”

Propflo says that while a significant majority of privately rented properties below an EPC grade C would need to spend close to or at the £10,000 cap (over 80%), 2% of properties would only require an average expenditure of £311 to achieve compliance, while another 6.2% would require an investment of £1,514 per property.

The analysis also finds that 81% of properties within scope have at least one low-cost energy efficiency improvement recommendation, including energy-efficient lighting or loft insulation, while 0.2% of properties only require a single low-cost improvement to get a grade C rating.

This analysis comes as the deadline for meeting new MEES regulations – expected to be announced later this year – could be relaxed.

Read more about EPC regulations.

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