The push to get UK landlords to upgrade their properties to improve energy-efficiency (EPC ratings) is not going as well as hoped, the Financial Times reports.

Situation

1. Energy Efficiency Measures:
   • The government had plans to improve the energy efficiency of private rented homes. This has possibly been delayed.
   • The purpose? By 2025, rental homes would need to meet certain energy efficiency standards for new tenants and by 2028 for all tenants.
   • These homes should be rated “C” or above, with “A” being the most efficient and “G” the least.
   • The cost? To upgrade a rental property to “C” level might cost around £7,430 on average.
2. Reactions:
   • Landlords are relieved as it delays an expensive upgrade.
   • Tenants? Not thrilled. Delays might mean higher utility bills for them.
   • The delay might not help the government achieve its environmental goals for 2050.
   • This delay has left many (tenants, landlords, industry) uncertain about future costs and changes.
3. Why the Hesitation?
   • There’s a feeling that the proposed energy efficiency timetable was too ambitious.
   • Doubts have arisen about the current Energy Performance Certificate (EPC) system, which has been around since 2007.
4. Political Context:
   • Inflation concerns and a looming general election might be influencing decisions.
   • The Prime Minister wishes for green policies to be realistic and not to unnecessarily burden the citizens.
5. Renters’ Concerns:
   • Delayed energy-saving actions mean colder homes and potentially higher energy bills.
   • Rent has been increasing, and demand for properties is high.
6. Landlords’ Struggles:
   • Over the past years, new taxes and regulations have made being a landlord costlier.
   • Mortgage interest is no longer fully tax-deductible.
   • Interest rates have increased significantly.
   • Despite these challenges, many landlords started retrofitting their properties to be more energy-efficient after it became mandatory in 2020.
   • However, most rented properties are still not at the desired “C” energy efficiency level.
7. Sell-off of Rental Properties:
   • Due to increased costs, some landlords are selling their properties.
   • However, a significant portion of landlords is mortgage-free or has held their properties for a long time, providing some financial cushion.
8. The EPC Debate:
   • While some see the EPC system as flawed, especially since it doesn’t account for a building’s usage, it’s still a useful measure.
   • Simple energy efficiency measures, like insulation or better windows, can indeed reduce heating costs.
   • However, the government’s delay in confirming changes means the original 2025 deadline for energy improvements might not be met.
   • If landlords wait too long, costs might increase due to inflation.

Summary

With potential changes in regulations and the uncertainty surrounding them, both landlords and tenants find themselves in a tricky situation. Being informed and prepared is crucial for both parties as they navigate the evolving landscape of UK’s rental market.