With EPC changes coming into force, coupled with the rise in energy bills, landlords are looking to increase the energy efficiency of their property. At the moment, landlords need to ensure their properties reach a rating of E in an EPC rating. A failure to do so can result in a fine. However, this minimum rating will likely increase to C for landlords to be able to rent out their property.
The new legislation has meant that many property investors are shrinking their property portfolios. As well as this, the renewed focus on EPCs means that many properties with low EPC ratings are receiving lower valuations on the property market.
With this in mind, some property investors are spotting the potential and conducting a property flip.
EPC Upgrading Potential
Many landlords are now well aware of the government proposal to ensure all rental properties in the UK. They are also aware that properties with a rating of E or D can often receive a lower valuation on the property market, especially for buy-to-let properties.
Currently, over two-thirds of landlords have properties with an EPC rating lower than C. 80% of these landlords are now committed to improving their rating with energy-efficient measures.
By upgrading their existing properties, landlords can benefit from:
- Being ready for new regulations
- Supporting tenants with cost-of-living crisis and their energy bills
- Attracting future tenants looking for energy-efficient homes
- Increased property valuations and rental income
While some property investors have concerns about the cost of upgrading their EPCs, other landlords are spotting the potential available thanks to the benefits high-rated EPCs can bring.
Capital Appreciation Of Low-EPC Rated Properties
Recent research has found that more than half of landlords with over ten buy-to-let properties in the portfolio are considering buying homes with an EPC of D or lower. The reason behind this is they’re willing to invest in the measures that will bring the EPC up to a C or higher so that they can then rent the property out with a higher valuation on the property market.
So, while the government is encouraging higher EPC ratings to increase the nation’s energy efficiency, landlords may find that upgrading EPCs to A, B or C ratings has financial rewards too.
Research suggests that properties with an A-rating can achieve a 14% higher property valuation. Split regionally, properties that improve their rating in the southwest may see a valuation increase of 7.7%. However, those in the northeast can increase their value by 12.2%.
Upgrade Your EPCs With Assessment Hive
If you’re a landlord looking to improve the EPC rating of your properties, speak to Assessment Hive. Our team offer honest, helpful EPC assessments where we can review your property at its current level. We offer advice on the cost-effective improvements to upgrade your EPC. Talk to our energy-efficiency team today here.