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Prime Minister Rishi Sunak recently scrapped EPC targets, citing various concerns, including the high costs passed onto the public during the cost of living crisis. He stated; ‘it cannot be right for Westminster to impose such significant costs on working people especially those who are already struggling to make ends meet and to interfere so much in people’s way of life without a properly informed national debate.’
Furthermore, the government expressed concerns about the potential impact of the targets on landlords. If the expenses associated with property renovations became very high, it might have prompted numerous landlords to consider selling their rental properties. Consequently, this could lead to a reduction in supply and higher rents.
Initially, EPC targets were a crucial component of the Net Zero policy, which aimed to ensure that all rental properties achieved a minimum EPC rating of C by 2028.
The potential costs associated with upgrading properties to meet EPC standards have been a point of concern. A study by a leading real estate company revealed that landlords with properties rated D needed to invest an average of £5500 to achieve a C rating. This suggests that properties with lower ratings could incur even higher costs, and landlords with multiple properties could have faced eye-watering charges.
However, the Prime Minister's recent announcement effectively eliminated these targets, and the government task-force overseeing the project was disbanded. This change raised questions about the future of energy efficiency in the rental market.
For landlords who had held-off starting their renovation plans, the announcement may have been met with huge relief. But, for those who had, it may have caused frustration.
For brokers, second charge buy to lets were looking to be an important solution for landlords seeking financing for EPC renovations. This may not necessarily be the case anymore.
However, it will always be a useful borrowing option for landlords needing to raise extra funding, so it is still important for brokers to be well-versed in this solution.
