New research has revealed that landlords may struggle to meet the government’s ambitious 2030 target for energy efficiency in rental properties.

While progress has been made, the rate of improvement needs to dramatically increase to hit the goal.

The 2030 Target

The government aims for all privately rented homes in England and Wales to achieve an Energy Performance Certificate (EPC) rating of A to C by 2030. This means making your properties more energy-efficient, cutting down on energy bills and helping the environment.

Are We on Track? Not Really

According to data from Hamptons, it’ll take another 18 years to bring all rental homes up to the desired EPC rating at the current pace. This is a significant improvement from the 89-year projection back in 2016, but still falls short of the 2030 target.

To hit the 2030 goal, around 340,000 rental homes need to be upgraded every year. Currently, only about 115,000 are expected to meet the standards in 2024. That means we need to triple the rate of upgrades!

Good News – Some Progress

There’s a silver lining: 39% of EPC assessments on rental properties this year resulted in a higher band rating. This means landlords are taking steps to improve energy efficiency.

Over half of rental homes (55%) now have an EPC rating of C or better, compared to 48% of owner-occupied homes.

The Challenge – Older Properties

Older and cheaper properties, especially in the North of England, are the most challenging to upgrade. These properties also tend to generate higher rental yields.

For example, EPC D-rated homes currently average a gross yield of 7.6%, compared to 5.5% for newly built EPC A-rated homes. EPC E-rated properties achieve the highest yields (7.9%), but their condition and construction often make achieving an EPC C rating unrealistic or impossible.

What This Means For You:

• Time is of the Essence: Landlords need to act now to make their properties more energy-efficient.
• Costly Upgrades: Upgrades can be expensive, sometimes running into tens of thousands of pounds.
• Clear Guidance Needed: Landlords need clear and consistent guidance from the government to understand the requirements and deadlines.

The Bottom Line:

While the 2030 target is achievable, landlords need to step up their efforts. With proper planning, investment, and government support, it’s possible to achieve a more sustainable and energy-efficient rental sector. This will benefit both landlords and tenants in the long run.