Landlords identify EPC-C tipping point

Introduction

In the Spring of 2025, the NRLA worked alongside the Alliance Manchester Business School in a collaboration which sought to examine landlords’ likely future required commitment to meet EPC-C standards, and what impact this may have on the Private Rented Sector (PRS).
The topics incorporated in the research included:

• Recent investments to increase EPC rating
• Overall costs/investment 
• Future required investments 
• Grant availability to support improving energy efficiency

The research consists of 1,000 online interviews with landlords, conducted independently by leading market research company Dynata. A more detailed note on methology is at the foot of this post. All statistics and results quoted are as reported by Dynata (results may be rounded for reasons of presentation only).

The NRLA are solely responsible for the interpretation and presentation of results in this post. Alliance Manchester Business School have not contributed to this post in any way. 

Investment in property stock

The researchers asked landlords whether they had upgraded a property from EPC-D or below to EPC-C or above:

Two thirds – 67% - of landlords stated they had done this on at least one property “in the last five years”.

Landlords then set out the amount they had spent to meet this standard. Note that the researchers asked portfolio landlords to think only about the expenditure on their most recent property:

For this group of 600+ landlords, the data below outlines their 'headline' experience of grant applications:

To add some further context to these results:

1. The 57% of the group of landlords identified above who had attempted to access grant support equates to approximately 38% of all landlords participating in the survey
2. 50% of the sample responded “around half” when asked for a proximation of the value of the grant awarded in support of the investment

The research focused on those landlords with property below EPC-C – and the costs of upgrading property. 

• Note that these landlords split into two groups - based on whether these landlords currently expect to upgrade or not)

The study asked both these groups of landlords landlords to review “how significant cost barriers were” in undertaking the necessary investments required to raise the EPC-ratings of their portfolios:

* In addition to the final figure of 22% reported above, a further 15% responded they were "uncertain" whether or not they could fund the investment.

The actions landlords might take

Chart 2 below identifies likely strategies landlords may take in the expectation of EPC-C becoming a base standard:

Just to confirm these results: when researchers separately asked landlords directly as to whether they envisaged selling property because of regulation change:

Over a third - 38% - responded “Yes - I will be selling at least one of my properties”

(i.e. an identical figure to the aggregate of the two options highlighted in blue above.) 

Is there a point at which selling becomes the only option? Chart 3 shows the landlord response when asked by researchers “At what cost per property would meeting EPC-C become financially unviable for you?”

(Note: only those landlords with properties below EPC-C and are planning upgrades were asked this question)

Summary

This paper provides more evidence that it could be the possible changes to EPC regulation in England & Wales which forces many landlords to leave the sector, even as many landlords prepare to face up to the changes coming from the Renters’ Rights Bill.

There has already been considerable investment by landlords in the energy efficiency of their property stock. A considerable proportion of these landlords have accessed grant finance – one-third of all landlords have sought grant funding (mostly successfully) to help fund energy efficiency projects. 

However almost half of all landlords continue to have properties at EPC-D or below – and this of course is based on the current rating system, which itself may change. A high proportion of landlords stated they cannot hope to meet the costs of raising the energy efficiency to the requisite standard unless either: 

1. Landlords act in a manner which would result in a raw deal for tenants (less choice and higher rents), or 
2. They can access a grant which would contribute towards meeting the costs. 

Chart 1 indicates more than two-thirds (67.8%) of landlords who had invested in energy efficiency projects had invested £10,000 or less, Chart 3 also indicates that, should £10,000 per property be now needed to meet revised energy efficient targets, this could prove something of a tipping point for independent landlords.

Landlord investment to date may have focused on the "low hanging fruit" of energy efficiency improvements - by which we mean items such as boilers, double glazing, or loft insulation. 

Further to this, Chart 2 shows that financing, if beyond personal savings, would need to include grant funding. Otherwise the outcome would be detimental to tenants - stock reduction and rent increases would be inevitable. 

The current consultation anticipates a £15,000 cap on investment (followed by a ten-year exemption). This is well above the tipping point identified here.

Grant schemes could be tapered in favour of  'higher ticket' items to help necessary landlord investment stay below the tipping point of £10,000, especially for older hosuing stock.

This could result in higher levels of investment, economic additionality (through sales, installation and after-service) and, crucially, the retention of stock in the PRS. To make sure more properties are made energy efficient, supporting landlords would seem to be a more sensible approach than forcing rather than forcing property sales.     

Footnote: Methodology

In this study:

• Exactly 1,000 landlords participated. 
• Almost two-thirds (63%) of survey participants were male.
• One-fifth (21%) were over 55 years of age, whilst 39% were under 35 years of age. 
• Whilst 44% of participants were single-property landlords, 16% let more than five properties.
  • The objective of the sampling was to follow the landlord profile (by portfolio size) set out in the 2024 English Private Landlord Survey (EPLS). Note, it was not possible to match this reference point precisely.
  • This is very different to typical NRLA membership surveys which consistently have around 15% of respondents as single-property landlords (reflecting the composition of NRLA membership)
• 5% of the landlords had “most of their rental properties” in Wales. 

All research was online and conducted independently by leading market research company Dynata. The NRLA and Manchester Business School drafted the questions through the collaboration.

Dynata use their own, market-leading, audience databases to contact landlords:

1. One-third of landlords contacted in this survey were current members of the NRLA
2. Almost 40% (38%) stated they had never been NRLA members - this the largest group of participants
3. A further 10% declared themselves to be former members.
4. 16% of respondents stated they had “never heard” of the NRLA