There’s an ongoing tension playing out across the private rental sector (PRS) that advisers with landlord borrower clients should certainly be aware of.
On the one side, we have seen industry bodies like UK Finance recently warning that future EPC regulation changes could shrink rental supply and impact tenant choice. On the other, local authorities are already issuing fines to landlords who haven’t even met current EPC requirements, let alone the proposed higher standards.
This contradiction is more than just a curiosity, it represents a risk to landlord clients who may be delaying action on improving their properties, either because they’re unaware of the rules or they’re working on the assumption that EPC target for C and above compliance by 2028 or 2030 – depending on what the Government’s consultation might actually recommend - might eventually be dropped altogether. Neither of those positions are safe.
Let’s be clear: while there’s been significant lobbying for a rethink on a 2028/2030 target to get all new rental tenancies up to EPC C, the Government has not - at the time of writing - reversed that policy or shelved its broader energy efficiency ambitions.
In fact, the opposite appears to be true. Local councils have stepped up enforcement of the existing requirement that all rental properties must be at EPC E or above. Evidenced by the case of the landlord recently fined £4,500 by Tewkesbury Council for letting out F and G-rated properties. It’s real, it’s happening, and advisers must help their clients avoid finding themselves in similar situations.
Yet, UK Finance’s recent comments that many landlords are “in the dark” about the changes to are also worthy of concern. Research suggests a significant number of landlords are either unaware of the EPC C target or are unclear on what they need to do to achieve it. This is where advisers come in. Education, clarity, and practical help have never been more important.
Landlords are dealing with a lot right now. Fluctuating interest rates, increased regulation, Section 21 reforms, local licensing schemes, higher operational costs, not forgetting what the Renters’ Rights Bill will deliver into legislation.
It’s not surprising that EPC ratings aren’t top of mind. But they need to be up there. The risk is not just regulatory, it’s commercial. Properties that don’t meet the right EPC standard could become unlettable in a few years’ time.
As a consequence, they are already failing to secure the most competitive mortgage deals available now. Plus, the longer a landlord delays, the more expensive and disruptive it becomes to bring a property up to standard later.
And let’s not forget, improving a property’s energy efficiency isn’t just a box-ticking exercise. There are real, tangible benefits, right now, for landlords who take this seriously.
We, for example, offer both lower interest rates and cashback incentives for landlords whose properties are already at EPC C or above. That’s money straight back in the landlord’s pocket.
But more than that, tenants increasingly want warmer, more energy-efficient homes, especially with utility bills remaining high. A property with an EPC of C is more attractive to prospective renters. It will likely let quicker and for a higher rent than one rated D or E. Over time, better tenant satisfaction could also mean fewer voids, less churn, and reduced management hassle.
The reality is that, ultimately if nothing changes, then landlords who want to continue letting out properties, are going to need to make these improvements. It’s a cost of course, but perhaps it is better to view it as an investment in the long-term viability and profitability of the property. With access to mortgage products specifically tailored to greener homes, and a growing awareness among tenants, there’s a strong financial case for acting now.
Of course, advisers need to be realistic. Not all landlords have the upfront capital required to undertake major improvements, if they are required. But that’s where advice can really make a difference.
Whether it’s refinancing to release funds, switching to a product with cashback, or securing a better rate based on EPC performance, there are options on the table. And with time available, landlords don’t need to do everything at once. But they do need a plan.
So yes, while UK Finance is right to raise the alarm about the potential risk to rental supply, and while we could yet see timelines adjusted or softened, landlords can’t expect this or afford to wait. The fines being handed out show councils are not standing still. The market isn’t standing still. And neither should they, or their advisers.
Instead of hoping for political reversals, the focus must be on preparation and proactive decision-making. A conversation now about EPCs could save a landlord a fine, unlock a better rate, or make their property more appealing to tenants.
The opportunity is there, and so is the urgency. Advisers have a crucial role to play in helping landlords navigate any complexity, secure the right finance, and futureproof their clients’ portfolios.
