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Sunak Abandons EPC Regulations, Yet Majority of Landlords Already Invested in Upgrades

In a surprising twist, Shawbrook Bank has unveiled research suggesting that a substantial majority of UK landlords had proactively made preparations and financial commitments to comply with the now-discarded 2025 Energy Performance Certificate (EPC) regulations for residential rental properties.

The abandoned regulation, which had called for rental properties to achieve a minimum EPC rating of C by 2025 for new tenancies and for all rental properties by 2028, was among several casualties of Prime Minister Rishi Sunak’s recent policy overhaul. As a General Election looms, Sunak faced a barrage of criticism for delaying or scrapping various initiatives aimed at achieving Net Zero.

Conducted by Censuswide in August 2023, Shawbrook’s research surveyed 1,012 UK landlords aged 18 and over, yielding the following key findings:

  1. Proactive Preparedness: An astonishing 80% of UK landlords claimed they were already prepared for the 2025 EPC regulation deadline. Within this group, nearly a third (30%) stated that their properties already boasted an EPC rating of A-C, while half (50%) affirmed they had strategic plans in place to enhance their EPC rating before 2025.
  2. Unprepared Minority: A notable 17% of landlords admitted they were unprepared and had no intentions of improving their property’s EPC rating.
  3. Ignorance of Regulation: A mere 3% confessed to being unaware of the impending EPC regulation.
  4. Investment Commitment: Nearly half (46%) of landlords disclosed investments ranging from £500 to £20,000 in improving or upgrading their properties in the past year. The mean average expenditure by landlords stood at an impressive £25,148, soaring to £37,164 for those based in London.
  5. Cost Concerns: One-fifth (20%) expressed concerns over the labor costs associated with property improvements for their rental properties over the next six months, while 16% identified EPC regulations as a worry.
  6. Eco-Conscious Choices: The proposed regulations have spurred many landlords to adopt a more energy-conscious approach when acquiring new properties, with over a quarter (28%) prioritizing the purchase of newer, more energy-efficient properties in the coming six months.
  7. Deadline Shift Reactions: In response to earlier rumors of the EPC regulation deadline being pushed to 2028, 31% believed it would afford them more breathing space to complete improvements across their property portfolios, while 29% expressed their determination to proceed with their improvement plans regardless.

Emma Cox, Managing Director of Real Estate at Shawbrook Bank, commented on the implications of scrapping the impending EPC regulations, stating, “Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties. But while policies shift, climate change is going nowhere, and energy-efficient buildings will remain central to net-zero plans. Rules might not be changing as soon as 2025, but professional landlords with modern, energy-efficient stock will be in the best position to attract tenants, reduce potential voids, and, importantly, be prepared for future legislative change.”