Landlords welcome Prime Minister Rishi Sunak’s reversal on green policies. Associations like NRLA and Propertymark had voiced concerns about costly energy efficiency targets in 2020, making property letting financially challenging.
These concerns were expressed during the consultation on Minimum Energy Efficiency Standards, which required landlords to upgrade properties to EpC band C or above by 2025 or 2028, depending on the tenancy type. Surprisingly, the government never responded to this consultation, leaving landlords uncertain about the future impact of these standards.
According to a recent analysis by Rightmove, achieving stricter energy efficiency requirements in the private rental sector might take decades. The report highlights the need for significantly improved incentives to expedite progress towards the government’s target of achieving an EPC rating of C or higher in both privately rented and owner-occupied properties.
Based on current progress, Rightmove’s analysis suggests that it could take 31 years for 100 percent of privately rented houses to achieve an EPC rating of C or better. For privately rented flats, the estimated duration is 16 years.
In a recent ‘Greener Homes’ report by the portal, it was revealed that landlords are increasingly avoiding lower-rated properties. Approximately 61 percent of landlords stated that they would not consider purchasing a rental property with an EPC rating below C. This marks a significant increase from the 47 percent recorded in the previous year’s survey.
For owner-occupiers, the data indicates that only four percent of homeowners have plans to install a heat pump. However, those who have upgraded their homes from an EPC rating of F to C could potentially command an average price premium of nearly £56,000, in addition to local house price growth.
The report also highlights that 60 percent of homes listed for sale on Rightmove and 50 percent of homes available for rent have an EPC rating of D or lower.
To accelerate progress towards energy efficiency goals, the report suggests several potential incentives, including stamp duty rebates for buyers who make green improvements shortly after purchase, more substantial incentives for energy-efficient homes in both new mortgages and remortgages, increased grants or tax benefits for green technology like electric car charging points and solar panels, and support for new innovations that expedite the development and adoption of energy-efficient technologies.
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