England’s landlords face a £19.9bn bill to bring private rented homes up to EPC C standards by 2030, research reveals.
According to Octane Capital, just over half of privately rented properties currently fall below the government's minimum energy efficiency threshold.
That’s around 2,479,757 homes that will need improvement over the next four years.
While it's not yet law to meet the EPC C rating, the government is expected to unveil legislation this year for the deadline to be fixed.
EPC C deadline
The firm's chief executive, Jonathan Samuels, said: "While the government has extended the deadline for the private rented sector to reach EPC C, this research shows that the scale of refurbishment required remains substantial, with close to £20bn worth of improvements needed across England alone."
He added: "For many landlords, meeting the EPC C requirement won't just come down to recognising what needs to be done, but having the ability to fund the work and deliver it efficiently, particularly where properties require more extensive upgrades."
Most homes are below EPC C
The research shows that 50.1% of England’s PRS homes are rated below EPC C and they will cost, on average, £8,017 each to improve.
London has the biggest share of that cost, with £4.3bn of investment required to upgrade PRS homes in the capital.
The North West follows with an estimated £2.3bn, while the South East is close behind at £2.2bn.
Rented homes in the North East will need the lowest overall spend, with total refurbishment costs around £503m.
Older homes an issue
Older homes present the biggest challenge with poor insulation and poor heating systems.
Octane also says that outdated lighting and single glazed windows are issues too.
Necessary improvements include fitting new boilers and windows, insulating wall cavities and lofts, along with LED lighting.
The firm warns that landlords may struggle to access the funds needed to carry out the work in a relatively short timeframe.
And that, it says, may play a decisive role in determining whether landlords can meet the 2030 deadline.
No need for rent rises
However, the government says that despite the hefty price tag, landlords won't have to increase rents.
The issue was raised in a written Parliamentary question by Conservative MP Paul Holmes on the impact of energy efficiency costs on open market rents.
In response, the energy consumers minister, Martin McCluskey, said landlords would not need to pass costs on to tenants.
He said: "We have engaged with landlord and tenant groups in developing this policy and set out several proposals to help landlords reach the new standard.
"Our proposed changes should not require landlords to increase rents.
"Instead, they will help tenants cut their energy bills by delivering more energy-efficient homes."
Student landlord EPC issues
Simon Thompson, the managing director of Accommodation for Students, said: "Lots of student landlords face a significant bill to meet EPC C rules by 2030 under the proposed changes.
"But they will be competing with other landlords for finance and workers to carry out the work."
He adds: "Older properties will undoubtedly be an issue due to poor insulation, inefficient heating and outdated fittings.
"Also, while the government insists landlords will not need to raise rents to fund improvements, its own consultation reveal some landlords will have to increase rents or exit the market due to these EPC compliance costs."
