Homeowners are forced to sell their homes due to the Government’s energy improvement plans

Experts believe landlords may choose to sell their properties due to the cost of meeting the Government’s energy efficiency targets for rented homes.

The Government confirmed this week that all rented properties in England will have to have an Energy Performance Certificate (EPC) of “C” or above by 2030.

The requirement was part of the government’s election manifesto and was repeated by Energy Security Secretary Ed Miliband at this week’s Labour Party conference. The plan will be consulted on later this year.

Experts say many property owners could be forced to sell properties rather than comply with the new EPC rules unless the Government offers additional support.

A spokesman for the National Home Owners Association (NRLA) said: ‘Some homeowners may find they are unable to finance necessary improvements, particularly in areas with lower property values.

‘However, our previous research has shown that more than 80 per cent of homeowners had made or were planning to make energy efficiency improvements, with the majority using or planning to use their own savings or rental earnings to fund the improvements.’

A spokesman for the British Landlords Association said: “Yes, some landlords are already selling.”

The cost of upgrading rented properties to an EPC rating of C and above can cost thousands of pounds.

In theory, this should also improve the value of the property, but it does mean that owners have to bear an initial cost. For some properties, especially older ones, the cost increases substantially.

NRLA figures show that solid wall insulation can cost more than £20,000, especially in homes built without cavity walls.

Landlords with more modern properties will typically pay £9,000 to comply with the new EPC standards, Government figures show.

However, an NRLA spokesman added: ‘The costs of these changes vary widely depending on the type of property.

‘It’s also important to consider how homeowners are affected by the region their properties are located in. Our research in 2021 found that in some local authority areas in the North and Midlands, the estimated costs of improving home energy are around 25 per cent of the value of properties.

‘In contrast, in wealthy areas of London and the South East, the cost of retrofitting homes with heat pumps represents less than 2% of the total value of the property.’

The owners may also miss the 2030 deadline.

The NRLA spokesman said: ‘If there is clarity at an early stage about what is required, sufficient workers and a financial package that allows owners to plan improvements, 2030 could be possible.

‘But equally, if the expectation is to retrofit all rental properties that do not currently have EPC C or above by 2030, there is a huge amount of work to be done in a very limited time frame.

‘Otherwise, landlords could struggle to meet the high cost of home improvements and may miss the 2030 target, reducing the number of rental homes available and driving up rents.’

Asked if the owners would meet the deadline, the BLA spokesperson simply said: “No.”

There is also the possibility that rents will have to be increased to cover the cost of energy improvement works.

The NRLA said: ‘Upgrading to an EPC C will require a higher level of investment, and the ability of property owners to fund this themselves will vary, particularly given the regional variability in their options for leveraging property value financing.

‘Some landlords may have to increase rents to accommodate higher maintenance costs, but this will largely depend on the landlord’s individual circumstances and the type of property.’

The BLA said rents would not rise for EPC reasons, but only because they are already rising due to many landlords already leaving the rental sector.

Finding up-to-date figures on the number of rented properties in England that are below EPC Band C is difficult.

According to data analysts at Outra, there will be around 4.5 million rented homes with EPC ratings of D or below in the UK by 2023, not just in England where the 2030 rule applies.

The latest Government figures show that 8 million properties in England were below band C (or 31 per cent of the total of 25.2 million properties), but this dates back to the 2021 census and applies to all homes, not just rented ones.