LandlordBuyer has cautioned that forthcoming energy efficiency standards could render millions of rental properties non-compliant by 2030, potentially preventing them from being legally let.
Property professionals have described the situation as an emerging “EPC time bomb”, with large numbers of privately rented homes expected to require significant upgrades to meet a proposed minimum EPC rating of C.
Estimates indicate that around 2.9 million rental properties in England currently fall below this threshold, holding an EPC rating of D or worse. Government assessments suggest that upgrading a property to EPC C could cost an average of £5,400, with a spending cap potentially reaching £10,000 per property.
For many landlords, particularly those with smaller portfolios, these costs present a serious financial challenge. Rising mortgage rates, additional licensing requirements and increasing regulatory obligations are already placing pressure on profitability within the sector.
Older properties are likely to be the most affected. Homes built during the Victorian period or early 1900s may require substantial works to meet energy efficiency targets. This could include installing insulation, upgrading heating systems, fitting double glazing or incorporating renewable energy technologies.
There are growing concerns that these combined factors may lead some landlords to withdraw from the market altogether, reducing the overall supply of rental housing.
Jason Harris-Cohen, Managing Director at LandlordBuyer, said: “We’re increasingly hearing from landlords who are concerned about how future EPC requirements will affect their properties. For many owners, particularly those with older homes, the cost of reaching an EPC C rating can be substantial and may simply not be financially viable.”
He added that for landlords who are considering exiting the rental market, or wanting to sell a house with tenants, it can be a practical solution that avoids unnecessary disruption for tenants.
“Many landlords assume that selling a rental property automatically means asking tenants to leave first, but that isn’t always the case. In reality, properties can be sold with tenants still living in them, which can help avoid evictions and maintain stability for renters.”
Specialist services that purchase tenanted properties are gaining traction among landlords seeking a simpler route to sale, avoiding some of the complexities and delays associated with traditional property transactions.
Although energy efficiency reforms are designed to improve housing quality across the UK, the scale of investment required may lead some landlords to question whether remaining in the rental market is sustainable over the long term.
