Requests for energy efficient rentals clearly evident

Tenants are increasingly asking private landlords for properties with good green credentials. That’s the findings of the latest Handelsbanken annual Property Investor Report.  

The research document questioned 200 UK property investors with large portfolios to establish the sentiment around energy efficiency. Almost all of those taking part – 95.5% – said they had experienced tenants asking for some form of sustainable property feature in the last 12 months. More specifically, 73% of tenants had requested either heat pumps, solar generation or EV chargers.  

Other tenants were more concerned with a rental’s overall energy performance, rather than specific aspects. The report found 58% of tenants had made a request to a landlord for properties with an Energy Performance Certificate (EPC) rating of C.  

The subject of minimum energy standards is back on the political table following Labour’s victory in the general election. We have followed the party’s stance on EPC standards in private rentals for some time. Its Warm Homes Plan states it will ‘ensure homes in the private rented sector meet minimum energy efficiency standards by 2030’.  

While the King’s Speech in July left out details of the party’s plans for private rental EPCs, it is widely thought the Prime Minister or the Housing Secretary will soon announce the reinstatement of a higher, mandatory benchmark for landlords to meet.  

The last Government abandoned plans to increase the minimum EPC for rented properties in England and Wales from the existing E to a C – a edict it wanted to introduce from the end of 2025.  

With the process of improving energy standards in buy-to-lets a possible complex, disruptive and costly exercise, a new deadline of 2028 is being forecast – a date by which all tenanted properties must have an EPC of at least a C. Further details are expected when the full Renters’ Rights Bill is published, which is expected this autumn.  

What are the EPC requirements in Wales?

At present, private rented properties in Wales must have an energy rating of E or above. It is quite possible that any changes to minimum energy standards set out in Labour’s Renters’ Rights Bill will apply to Wales’s private rental sector.  

What are the EPC requirements in Scotland?

Earlier in 2024, the Scottish Government closed its consultation on the Heat in Buildings Bill, which aims to set new energy efficiency standards in private rentals. Although it may be subject to amends before it becomes law, the Bill may require some private landlords to make changes to their buy-to-let properties so they use less energy.   

The proposals include the mandate for all private rental properties in Scotland to have a C-rated EPC by the end of 2028 – applicable at the time of a new tenancy. Long term proposals include requiring private landlords to replace existing polluting heating systems (such as gas and oil boilers) with clean heating systems before 2045.   

This year’s Property Investor Report and a change in Government shows that the gap is closing between what tenants are demanding in terms of energy efficiency and what will be a compulsory requirement among the landlord fraternity.  

If you would like to discuss your buy-to-let’s current EPC rating and consult on how this can be improved, please get in touch.