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EPC, market insights

Unveiling the Impact of EPC Ratings on UK Rental Market

January 2024

We're happy to share insights from a recent research made by Joshua Lo, a dedicated student from University College London (UCL), who delved into the world of Energy Performance Certificate (EPC) ratings in the UK.

Joshua's research, conducted as part of his dissertation, utilised data provided by Repit, shedding light on the potential implications of the proposed reform to ban rentals with low EPC ratings (originally planned for 2025, but currently postponed), how EPC impacts landlords, tenants, and the broader property market.

Why Ban Low EPC Ratings? A Glimpse at the Bigger Picture:

  • The key driver? Climate change! The UK government aims for net-zero carbon emissions by 2050, and improving energy efficiency in homes is a crucial step.
  • This proposed reform builds upon the 2020 ban on renting properties with F and G ratings, demonstrating the government's commitment to sustainability.

Landlord Concerns and Challenges:

Joshua identifies three key challenges landlords face when it comes to upgrading their properties:

  • Financial burden: EPC improvements can be costly, making landlords hesitant to invest.
  • Split-incentives dilemma: Improved EPC often benefits tenants through lower bills, while landlords may not see immediate financial gain.
  • Government policy limitations: Past initiatives like the Green Deal haven't been effective in encouraging EPC upgrades.

Impact on Landlords and Tenants: Navigating the New Landscape:

  • Landlords might feel the heat, with some potentially leaving the rental market if improvement costs are too high.
  • Tenants, on the other hand, stand to gain from lower energy bills and increased comfort in more energy-efficient homes.
  • Finding the right balance between rental demand and supply will be crucial in managing the market dynamics.

Rental Market Dynamics: Short-Term and Long-Term Implications:

  • Demand for at least C-rated properties is expected to soar, potentially leading to a short-term decrease in overall supply.
  • However, with government support and increased landlord adaptation, supply is likely to bounce back in the long run, potentially stabilising rental prices.
  • Improved EPC ratings translate to lower energy bills for tenants and reduced heating needs, enhancing thermal comfort and contributing to carbon reduction.
  • Sustainability and net-zero emissions goals are driving the move towards higher EPC standards globally, making future upgrades inevitable.
  • Advancements in technology and building practices hold the key to making EPC improvements more affordable and accessible, especially for older properties.

A Note about the Reform Postponement:

While the original 2025 implementation date for the ban on low EPC ratings has been postponed, the core insights of Joshua's research remain relevant and valuable. Understanding the impact of such regulations on landlords, tenants, and the market as a whole is crucial for navigating the evolving landscape of UK's rental property scene.

By dissecting these key points and insights, this blog post provides a clear and concise overview of Joshua Lo's research, empowering both landlords and tenants to navigate the changing world of EPC ratings and its impact on the UK rental market.

Remember, Repit is here to help! We're committed to supporting tenants in finding energy-efficient properties, ensuring a sustainable and thriving rental market for everyone.

Joshua Lo / Arthur Eremeev


Joshua Lo / Arthur Eremeev

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