Just one third of privately rented homes have an energy efficiency rating of C or above, new data reveals.
Specialist property lenders Octane Capital has said this means just 1.6m homes out of a total of 5m have an Energy Performance Certificate (EPC), which measures a property’s energy efficiency, of C or above.
Having an EPC has been a legal requirement since 2007 but the government now wants all privately rented properties to have a minimum EPC rating of C or above by 2028.
The cost of bringing homes up to this standard is estimated to be a minimum of £7,646 per property, meaning the total cost of improving the energy efficiency of the entire private rented sector is roughly £25.7bn.
The pressure to improve the energy efficiency of homes is also growing amid the cost-of-living crisis, with energy bills due to increase by 54% in April.
Octane Capital chief executive Jonathan Samuels says: “Many tenants will already be paying considerably higher energy bills than they would in a more energy efficient home and this cost is set to climb significantly higher this year.
“While the government has committed to ensuring new rental homes meet a minimum standard, it’s fair to say they shoulder some of the blame where existing rental properties are concerned.
“The cost to improve a property’s rating to a C is substantial and many landlords simply don’t have the financial resources to do so, having seen the profitability of their portfolio dwindle thanks to legislative changes to tax relief and an increase in stamp duty when purchasing a buy-to-let home.”
Samuels adds that the government’s “campaign against landlords had been inadvertently detrimental to tenants”, and that buy-to-let investing should be encouraged to raise standards across the sector.