Supporting your clients on the EPC pathway

Throughout the mortgage industry, there has been an ever increasing level of discussion and debate around EPC requirements for properties across the private rental sector (PRS). This has been going on for quite some time now but it’s not always easy to fully appreciate how this information is being generated and/or absorbed by landlords across the UK.

For example, in the early part of the Summer, Mortgage Advice Bureau (MAB) research revealed that nearly half of all landlords they polled were completely unaware that future measures designed to increase all PRS properties to a minimum EPC level of C would actually become law, and not just ‘guidance’.

Indeed, only 35% knew that Level C was likely to become the new minimum level to be able to let out a property, and a significant number – 18% - were not even aware of the potential changes at all.

However, our own data gathered by our partners BVA-BDRC in Q2 2023 suggests that 94% of landlords have some level of awareness around the new EPC ‘C’ legislation, with 71% of respondents saying that they are aware of it and fully understood the details. 24% said they were aware of the impending regulation but did not understand the details while only 4% were not aware of it at all.  Unsurprisingly, awareness and full understanding of the legislation was reported to be lowest amongst single property landlords and peaks amongst landlords with 20+ properties.

In terms of positive actions, approximately 6 in 10 landlords in the BVA-BDRC survey suggested that they would carry out works needed if they had a property that did not meet the required EPC standard. Within this, 37% of landlords would look to carry out the works at the minimum cost required, whilst 20% would carry out the works to maximise the long-term value of the property. 25% of landlords would not carry out any works and either sell the property or not re-let it. 

Landlords’ own savings would be the most common source of funding should they have to undertake any works to bring their property up to standard. However, a third would consider increasing rents to generate funds for any remedial work, a figure which rose to almost half of larger portfolio landlords.

The impact of EPC ratings is obviously a discussion which needs to continue at the highest government levels but, at ground level, advisers will continue to play critical role within any further educational and support process. Especially with those landlords coming up to remortgage, to discuss the EPC of a property, what it will need to get to, how landlords might want to do this work and how they could use mortgage finance to fund it.

And as a lender who is committed to providing a range of green options for both BTL and residential purposes, we are always on hand to further support you and your clients along this energy efficiency pathway.

Check out our Green Mortgages

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