Landlords face massive bills to meet Miliband’s EPC targets

Landlords across England and Wales are facing a staggering £26 billion hurdle to meet the government’s 2030 energy efficiency deadline.

New analysis from insurance provider Just Landlords reveals that 3.38m propertiescurrently fall short of the proposed targets.

Upgrade costs in some regions exceed the total annual rental income by almost 50%.

Under Energy Secretary Ed Miliband’s Warm Homes Plan, all tenancies are required to have a minimum EPC rating of C by October 2030. 

While the average cost to upgrade a non-compliant property stands at £7,633, the figures vary considerably, with rural and northern regions facing costs as high as £12,000.

Comparing the cost of green upgrades to the annual earning potential of a property, Just Landlords has calculated a ‘repair-to-rent ratio’, to see how long it will take landlords to fund essential retrofit works.

In Powys, where 83% of properties are currently non-compliant, the average bill to reach Band C is £10,759. 

With average annual rents in the area at just £7,248, landlords face an upgrade cost equivalent to 148% of their total annual income.

Areas with Highest Repair-to-Rent Ratio

1. Powys – 148%
2. Hartlepool – 138%
3. Isle of Anglesey – 135%
4. Gwynedd – 131%
5. Northumberland – 129%

In a stark contrast, thanks to higher rental prices, landlords in London can cover retrofit costs with just a few weeks of their rental income.

Areas with Lowest Repair-to-Rent Ratio

1. Kensington and Chelsea – 20%
2. Westminster – 22%
3. Islington – 25%
4. Hammersmith and Fulham – 25%
5. Camden – 26%

The analysis suggests that the divide between regions continues when looking at current compliance levels, with the majority of the most compliant regions being found in major cities and urban areas.

Most Compliant Regions

1. Tower Hamlets – 66% compliant
2. West Northamptonshire – 55% compliant
3. Southwark – 53% compliant
4. Bracknell Forest – 51% compliant
5. Islington – 51% compliant

Meanwhile, in more rural and coastal areas, the vast majority of homes require immediate investment.

Least Compliant Regions

1. Isles of Scilly – 90% non-compliant
2. Ryedale – 88% non-compliant
3. Isle of Anglesey – 87% non-compliant
4. Burnley – 85% non-compliant
5. Pendle – 85% non-compliant

As well as reporting higher levels of non-compliance, many of these regions also represent the highest physical risk, with over half of properties currently having EPC ratings of E, F or G. These ‘deep retrofit’ areas require major structural interventions, such as solid wall insultation and heat pumps.

Deep Retrofit Regions

1. Isles of Scilly – 70%
2. Isle of Anglesey – 60%
3. Ryedale – 57%
4. Eden – 56%
5. Powys – 52%

This article is taken from Landlord Today