With the laws set to change again for home energy performance grades from 2025 and current proposals stating that all newly rented properties will be required to have an EPC rating of C or above, UK landlords are under increasing pressure to ensure their properties will meet the requirements in time.
Despite time running out for the necessary changes to be made, just 41% of homes in England meet the recommended Energy Performance Certificate rating of ‘C’ or above - a 1% increase from the previous year, according to research from Open Property Group.
In 2022, only 40% of homes in England met the standard, despite the UK government wanting to reduce the country’s carbon footprint by significantly improving the energy efficiency of all homes.
The EPC scale is ranked from A-G and is used to measure the efficiency of a property based on the level of its emissions, its potential heat or energy loss and its likely fuel costs.
Currently, 63% of properties in the City of London meet the EPC rating of ‘C’ or above – the exact same percentage as 12 months ago. This is closely followed by Salford, which has 59% of properties meeting the recommended energy rating, a 1% increase on the previous year.
For the second year running, Birmingham was ranked last, where only 33% of homes meet the target energy rating. Bath and Brighton both fell below the national average, with just 38% of their homes scoring an EPC rating of ‘C’ or above.
In terms of regions across England, London saw 46% of its properties meeting the EPC band of ‘C’ or above. Yorkshire and The Humber was the lowest scoring region on the list, where only 36% of its properties meet the recommended EPC standards of ‘C’.
What does this also mean for UK landlords? The Government have proposed a bill where all rental properties would need to meet a compulsory energy performance certificate rating of band “C” on new tenancies by December 2025.
Jason Harris-Cohen, Open Property Group Managing Director, said: “There has been a lot of noise around ‘greening up’ the UK’s property stock, and despite multiple campaigns and press coverage, homeowners are woefully behind the Government’s target. The pressure is really building for landlords especially, as we are less than 2 years away from the new EPC deadline.
"As things stand, a huge chunk of buy-to-let properties will be illegal to let from the end of 2025, unless the properties receive energy efficiency upgrades to achieve a minimum EPC rating of C.
"A measly 1% increase in ‘C’ rated homes reflects the troubles landlords face. While changing light bulbs and adding an extra layer on insulation to the loft will no doubt help, the major alterations that really improve an EPC are expensive.
"Double glazing, solar panels and heat pumps tick the boxes but they are expensive items to purchase, cause major disruption when installing – perhaps even requiring the tenant to temporarily vacate – and there is no proven return on investment for newer technology. There’s also the added complication of a lack of materials and labour, meaning even the most willing of landlords are thwarted.
"It's interesting that Yorkshire and The Humber was the worst region for homes with ‘C’ ratings. Buy-to-let yields in the region are some of the strongest in the UK - perhaps landlords are reluctant to compromise their strong income by investing in eco improvements – a sentiment we feel is being repeated across the UK.”