Plans to make rental properties achieve an Energy Performance Certificate (EPC) rating of 'C' or above by 2030 are sparking warnings that the policy could create a two-tier housing system. Critics claim this will push up rents and reduce the number of available homes for tenants, as landlords face huge bills to upgrade their properties.
Under current proposals, landlords must meet the stringent EPC target, but owner-occupied homes can remain at lower energy efficiency levels. This disparity is already causing concern among commentators from Property118, who point out that government-commissioned Office for National Statistics data shows a higher proportion of rental homes already meet the 'C' standard than owner-occupied properties.
Landlords are facing significant financial implications as a result of this policy. Analysts warn that anyone considering purchasing a property with a lower EPC rating will face substantial upfront costs, including Stamp Duty Land Tax and the expense required to bring it up to 'C' standard before renting it out. This could make such investments unviable for many.
The policy comes at a challenging time for the private rental sector (PRS), which has seen a decline in available properties and subsequent rent increases. Critics argue that, rather than addressing supply issues, this policy will exacerbate them by deterring investment in lower-rated homes that could be brought into the market after upgrades, were costs more manageable or if targets applied universally.
Pressure is mounting on the government to reconsider the policy, including from Housing Minister Matthew Pennycook. Proponents argue that a stable and consistent approach to EPC targets is crucial for the health of the PRS and the millions who rely on rented accommodation.