Landlords face £21bn bill to increase energy efficiency of millions of homes

Labour wants to raise the minimum Energy Performance Certificate (EPC) of private and council rented properties from an E to a C rating

Landlords could be facing a total bill of more than £21 billion to increase the energy efficiency of thousands of tenants' homes, analysts claim. Labour's Secretary of State for Energy Security and Net Zero, Ed Miliband, wants to raise the minimum levels for private and social rented homes by 2030.

At present, private homes can be rented out if they meet a minimum Energy Performance Certificate (EPC) rating of E, while social rented homes (council properties) have no minimum at all. The government is to consult "by the end of the year" on proposals for both types of homes to achieve an EPC of C or equivalent by 2030.

However, research by Zero Deposit estimates that it will collectively cost the nation's private landlords £21.455 billion to bring their properties up to a C rating from the E currently required. It found that 55 per cent of all privately rented homes currently hold an EPC rating of D or below, with around 12 per cent of these holding an E, F or G rating.

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Yorkshire and the Humber is home to the highest number of privately rented homes with an EPC rating of D or less, with 74 per cent of homes potentially requiring an upgrade by 2030. The West Midlands (65 per cent) and East Midlands (62 per cent) also rank high in this respect, with London having the lowest proportion, with just 38 per cent of all privately rented homes rated D or below.

However, the research also shows that London landlords could face the highest costs in bringing their portfolios up to standard. The average cost of bringing a rental property up to a C rating is estimated to be £8,000. With 2,681,905 homes requiring improvement across England, that's an estimated cost to landlords of £21.455 billion.

In London, this average cost of improvement climbs to £9,000 per property, meaning London landlords alone could face a cost of £3.798 billion to bring their properties up to scratch by 2030. Even in the North East, where this cost is at its lowest, landlords are facing a total of £666.6 million to raise homes to a C rating.

Sam Reynolds, CEO of Zero Deposit, said: "Our new Labour Government has been quick out of the blocks with respect to rental market reform, with the Right to Rent bill widely focused on the welfare of tenants, with little consideration for those who provide the rental accommodation we so sorely need. The latest move to make a EPC rating of C mandatory by 2030 is much the same in this respect.

"Whilst it is, of course, a positive to improve the energy efficiency of rental homes within the private rented sector, the mandatory obligation to make these improvements is likely to cost private landlords billions. Yet another cost incurred due to legislative changes will likely leave a bad taste in the mouths of the nation's landlords and it could well be the final straw for many who are sat on the fence as to their future within the sector."

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