A total of 340,000 homes will have to be upgraded every year to hit the new 2030 EPC-based energy target imposed by Labour’s Energy Secretary Ed Miliband, a leading estate agency has claimed.

To meet the deadline, the same number of homes will need to see energy improvements over the next five years as have been upgraded in the past 30 years.

However, at the current pace of improvement, it will take landlords until 2042 to bring all privately rented homes up to an EPC rating of A-C, according to new figures from Savills.

The previous government had planned to ban rentals of homes with a sub-EPC C-rating by 2025, but this was scrapped last autumn.

Higher band

Savills’ research shows that 39% of EPCs carried out on rental homes this year saw the property move into a higher band, up from 34% a decade ago.

However, this rate still falls below the level of upgrades seen in the years leading up to 2018, when the requirement for rental homes to achieve an EPC rating of at least E was introduced.

The number of rental homes that will need to make improvements to hit the EPC C rating target represents a threefold annual increase on the 115,000 homes expected achieve the rating this year.

Many landlords have pre-empted the change, according to Hamptons Head of Research, Aneisha Beveridge. Given the increasing importance of an EPC C rating, rental homes moving EPC bands were most likely to move from a D rating up to a C rating.

Save £500

Half of homes that were previously rated D went on to achieve at least a C rating upon reassessment this year. Meanwhile, 29% of homes that had an EPC E rating went on to be reassessed as having a rating of C or above.

The financial benefits for tenants living in more energy-efficient homes are substantial, particularly in light of much higher energy prices following Russia’s invasion of Ukraine.

The average tenant could save £500 per year on utility bills if their home is upgraded from an EPC D to C rating, representing a 76% increase in savings since 2019. For tenants in EPC E rated homes, the potential savings rise to £1,248 per year, an 83% increase since 2019.

Hit hard

Propertymark’s recent research report, Lagging behind: energy efficiency in low-viability properties, highlighted the fact that in some local authority areas of the North and Midlands, the estimated costs of improving home energy efficiency can be around 25% of property values, while in affluent parts of London and the South-East, retrofitting with heat pumps represents less than 2% of overall property value.

The rental industry body also raised concerns about the 350,000 listed homes in England, and approximately 600,000 commercial properties dating from before 1919.

It says the increased costs of retrofitting historic building makes raising EPC ratings unaffordable for many property owners.

‘One size fits all’

“A ‘one-sized-fits-all’ approach rarely works in any policy implementation but when dealing with affordability and property this is particularly true,” said Timothy Douglas, Policy and Campaigns Manager at Propertymark.

“When we look at property value against the estimated cost of retrofit improvements for energy efficiency, we see a stark geographical divide making the feasibility of carrying out works required unequal across the country.

“This means that those living in lower value areas will be penalised when they are unable to afford the measures needed to bring their homes in line with UK government targets.”