What do Landlords Know about the Upcoming EPC Changes?

An eye-opening report from specialist buy to let lender Shawbrook Bank looks into the upcoming EPC. How will this affect landlords across the UK, how are they planning to meet the deadline, and what do landlords need to help start this large project?

An ambitious target for the industry, the changes are set to affect current landlords and any future landlords, whose choices in investment property may evolve and change as a consequence. With concerns around whether landlords will struggle to meet the tight deadlines set out, many in the industry could be left with unrentable and unmortgageable properties.

The report explores the EPC challenge by looking at how knowledgeable landlords are on the proposed changes, their plans in relation to the EPC standards, and what type of support they anticipate they will need for work on the properties.

The scale of the EPC problem across the UK 

It won’t come as a shock that older homes are more likely to have a poor or lower EPC rating. For context, 36% of properties within the Private Rental Sector (PRS) were built before 1940, with Victorian properties making up 13%. In London, four in ten landlords said their properties were built prior to 1940. Of those landlords with Victorian properties, 30% said their property is rated D or below.

These older homes are more difficult to renovate, with any work done to the property required to match its style or original technique (thatched roofs, sash windows, etc.). The amount and scale of work needed will impact the time it takes to get the property to the correct standard and, as a result, increase the overall bill. These aspects could result in historical, period properties at risk of disappearing from the PRS.

Gaps in knowledge – what do landlords know?

One in seven private landlords (15%) admitted that they were completely unaware of both the EPC changes and the deadline of 2025 to complete the necessary works. A worrying 26% of landlords said they had little to no knowledge of the changes. Shawbrook reports that well-established landlords (those who have rented out properties for more than ten years) are the least likely to know the details around the changes.

Landlords with multiple properties are also at high risk. The report also states that landlords with more than one property said that they only knew the current EPC rating for a few of their properties, but not all of them. The implications of this are worrying, as it means that a staggering 25% of landlords don’t know what level of work they will need to undertake for their properties to meet the minimum ‘C’ rating.

What do landlords want? 

The outcome of this knowledge gap will have a substantial hit on the private rental market if landlords are not fully supported and made aware of exactly what they need to do. The report illustrates the severity of the problem and that industry professionals need to step up to help. A whopping 47% of landlords want guidance on or around what the proposed EPC legislation change will mean for them, including information on what it will mean in practice and where they should start.

37% of landlords are hoping to see the wider industry bring out clear incentives, such as competitive interest rates, to aid them in starting the process. Similarly, 29% of landlords want to see lenders and industry professionals coming forward, looking to help them meet the minimum ratings.

34% of landlords would like guidance on how to meet the deadline. With the amount of work required still a grey area for many landlords, knowing when to start can feel overwhelming. However, taking steps quickly could be the difference for some landlords making or losing rental income.

Interestingly, 21% of landlords would like a dedicated space to discuss shared problems and solutions, allowing them to work together to make changes and improve the private rental market.

How are landlords budgeting for these changes?

Estimated costs 

Landlords expect that these changes overall will cost an average of £5,900. It’s important to note that where many landlords will be starting their works at similar times, a spike in demand for labour and materials could mean that this figure is largely underestimated.

22% of landlords have said that they are entirely unaware of how much updating their properties could cost them. It is most likely that landlords with less than three properties will be unsure and therefore within this category.

It is estimated that the aftermath of the void periods for landlords to complete the works could result in an average loss of £5,000 in income. With the expected costs of £5,900, this could leave landlords with a £10,000 bill.

Actual spends 

Some proactive landlords have already taken steps to improve their properties. On average, landlords have spent £8,900 to date on upping their EPC rating, nearly 50% more than the average estimate.

This is a key takeaway from the Shawbrook report, and it is worth landlords noting that they may have only budgeted for half of the amount they will need to spend on this project, not taking the void periods into account.

How landlords plan on funding the changes

When asked if they had the funds necessary to complete the works, landlords responded as such:

- 31% of landlords said they would only just have enough funds available

- 14% of landlords don’t have access to the funds

- 6% simply don’t know

In terms of planning on how to fund the changes, 19% of landlords said they were currently financing the refurbishments with credit cards or short-term finance products. The majority, at 60%, were choosing to use personal savings or investments. Neither option is risk-free, and both come with financial risks, such as unaffordable interest rates on unsecured loans, or using up essential savings.

Impact on tenants 

Tenants will, of course, be affected by the carrying out of these refurbishments to get their homes to the minimum EPC requirement. 42% of landlords said that their tenants would need to vacate their properties whilst improvements were made.

How long tenants will need to vacate their properties will also differ. 38% said that their tenants would need to leave for four weeks, but the works could take up to four months in some more extreme cases.

Older properties are likely to leave tenants out of their homes for longer, with Victorian-era properties predicted to take at least five months to get to the new required standard.

On average, landlords expect to begin their property developments within the next 14 months to meet the deadline. 7% report needing to start within the next three to six months to meet the 2025 mark.

Future impact on landlord portfolios


25% of landlords have now said that they will avoid buying property with low energy ratings going forward due to the EPC changes.

24% of landlords have started to prioritise buying property with the potential to reach an EPC rating of C or above.

15% of landlords will now only buy properties that have been built in the past 20 years to avoid low EPC ratings.

30% of landlords want to purchase property that already holds an EPC of ‘C’ or above.


The report states that tenants have also wanted to see these changes coming into play for a while. 28% of landlords admit that their tenants have complained at least once about their property’s EPC rating, and a further 16% report tenants have complained multiple times.

Interestingly, 61% of landlords have said that they would be more likely to make the now necessary improvements to their property if their tenants requested them to.


In some cases, lenders will refrain from offering on properties that require more significant work. This will have a considerable impact on the market and landlords, as many will be unable to rent out their properties without making improvements, but unable to finance any work they need to carry out. There could be a proportion of landlords who, prior to these changes, held a substantial property portfolio, now left with properties that they cannot rent, sell, or improve due to the lender’s risk aversion.

What this means for the Private Rental Sector (PRS)

Overall, these changes will mean that the Private Rental Sector will see a large proportion of landlords passing on these costs directly to their tenants for lack of other funding options. More than half of landlords asked by Shawbrook Bank said they wouldpass on at least some of the costs to their tenants through increasing rents. Fewer than 23% said they wouldn’t pass on any costs at all.

Regionally, tenants in London are most likely to see an increase. With an average rent of £1,589 per month, 68% of landlords said they would likely pass on some costs to their tenants.

Similarly, landlords who have owned properties for between 11-15 years are most likely to pass on all of the costs to their tenants.

More generally, 18% of landlords expect their rents to gradually increase due to the improved EPC rating. New energy-efficient features such as better insulation, energy-saving appliances, heating controls, etc., will give a reason for landlords to up their rents.

Shawbrook Bank’s report highlights the desperate need for industry professionals to publish more information about the upcoming EPC requirement changes to create as much awareness as possible. A positive initiative to come out of this is an External Working Group, in the process of being set up by Shawbrook this year. The Group aims to become an open environment for key voices within the industry to discuss legislative change and solutions. It will also be a space for landlords to discuss their personal situation with not just lenders and brokers, but other landlords.

What should I be doing now? 

Now is the best time to start thinking about updating your properties; having a look over your property portfolio could help you identify areas to fund these energy-efficiency upgrades. Remortgaging onto the current competitive rates with a capital raise may be a viable option, but you must be wary of the Early Repayment Charges that could come with this choice. If your lender allows, a further advance is also an option to gain the capital needed to fund the works. Additional options include second charge lending and short-term bridging finance. There are options available on the market, but finding the one most suitable for you can be tricky. An experienced mortgage broker can help assess which option will be most affordable and effective in relation to your specific portfolio. Call me, Agata Rogozinska, on 01732 471602 or drop me an email at agatar@mortgagesforbusiness.co.uk, and I will be happy to help.


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