Survey: landlords prefer to sell properties than make them more energy efficient
Residential landlords in the UK are more likely to sell their properties rather than make the energy-efficient upgrades needed to meet the government’s new EPC ratings by 2025, according to a new survey.
Cleantech company Green Building Renewables, who commissioned the research, found 63 per cent of landlords said they plan to sell properties rather than invest in energy-efficient measures like insulation, heat pumps and solar. In London, as many as 75 per cent of landlords said they would sell.
Over two-thirds of landlords said they were concerned about how they would afford property improvements needed to meet the EPC ‘C’ rating or above that all new tenancies must have by 2025.
From April 1, 2025, the minimum EPC rating will be raised from E to C for new tenancies. This will be enforced from April 1, 2028, for existing tenancies.
Sixty-two per cent of landlords said the new regulations had made them consider whether it was worth keeping their properties. Although over 80 per cent of landlords knew about the potential impact a solar installation, for example, could have on their property’s EPC rating, only 43 per cent said they felt fully prepared for the changes.
New boilers (37 per cent), insulation (36 per cent), solar panels (29 per cent), LED lighting (29 per cent), and heat pumps (23 per cent) are all being considered by landlords as potential energy efficient improvements they could make. Still, one in five landlords needed to become more familiar with the financial support available from the government for such upgrades.
Incentives like the Boiler Upgrade Scheme (BUS) currently offer £5,000 towards installing an air source heat pump and £6,000 towards a ground source pump for residential properties. As long as a landlord is UK based, they can apply for the scheme for their properties. Similarly, there are now nearly 60 Green Mortgages available in the UK. Green mortgages, energy-efficient mortgages (EEMs) or eco-mortgages, are all names for home loans which have been designed to encourage energy efficiency and sustainability in residential properties. They offer financial incentives to homeowners who buy energy-efficient properties or improve the energy efficiency of a property. Incentives can take the form of lower interest rates, cashback, or additional borrowing at a lower interest rate.
Despite such incentives, 41 per cent of landlords thought they would have to spend between £5,000 and £10,000 on average per property. More than a quarter thought the costs would be over £10,000.
GreenBuildingRenewables.co.uk managing director Chris Delaney said: “The results from this survey are startling. The fact that such a high percentage of landlords would rather sell their energy-inefficient properties than improve them with technologies like solar panels and heat pumps raises some significant questions for the government and policymakers.
“Eighty per cent of the buildings that exist today will exist in 2050; as a nation, we have a serious responsibility to transform our buildings and make them more energy efficient, and residential landlords have a critical role to play in this transition. The fact that so many were concerned about the costs suggests that something has fundamentally gone wrong in the messages and their understanding of energy-efficient upgrades. Improving the fabric of their properties and installing technologies like heat pumps should be seen as an investment and not a financial burden in the properties they own.”
According to the latest data from the Office for National Statistics (ONS), there were 3.4 million UK residential lettings in 2023. The data shows average rent in the UK has been rising in recent years. In 2023, the average rent for a two-bedroom property in England was £1,098 per month, and the average rent for a three-bedroom property was £1,327 per month.
The high demand for rental properties in the UK is being driven by a number of factors, including:
- The rising cost of buying a home
- The increasing number of young people entering the rental market
- The growing number of people who are choosing to rent for longer periods of time
The ONS data suggests that the number of UK residential lettings is likely to continue to increase in the coming years. This is likely to put further pressure on rents, making it even more difficult for people to afford to rent a home.
The research surveyed 150 residential landlords from across the UK. The York-headquartered Green Building Renewables, the company who commissioned the survey, installs solar panel and battery technology, heat pumps and EV charging systems, and is committed to driving change and advocating for a transition towards sustainable and energy-efficient buildings in the UK.
The possibility of many residential properties being put on the market ahead of 2025’s EPC changes would pose some serious challenges.
Philip Fellowes-Prynne, CEO of Green Building Renewables’ parent company Efficient Building Solutions, added: “We call upon policymakers, industry stakeholders, and the wider community to collaborate and explore innovative solutions to make upgrading properties as an attractive a possibility as it is beneficial to the buildings and the UK economy.
“By developing robust financial incentives, streamlining bureaucratic processes, and implementing comprehensive educational campaigns, landlords should be empowered to embrace energy efficiency as a smart business strategy and a crucial step towards a greener future.”
Green Building Renewables intends to share the complete survey findings through its various platforms and provide resources for landlords that educate on energy efficient upgrades. It hopes this will stimulate a broader dialogue within the real estate industry and foster actionable change.
