Why More Landlords Are Investing in Energy Efficient Homes—and What You Should Do Now

Rising Lending on Energy Efficient Properties Signals a Shift

Paragon Bank has reported a 7.7% year-on-year increase in buy-to-let lending for properties rated EPC A to C, which now account for over 56% of new lending. This trend aligns with landlords preparing for the upcoming regulation from October 2030 mandating rental homes meet at least an EPC C rating.

Why EPC C by 2030 Matters to Landlords

From 1 October 2030, landlords must ensure their rental properties meet a minimum EPC C rating or face penalties and potential difficulties letting their homes. This forms part of the Government’s broader commitment to improve energy efficiency, reduce carbon emissions, and lower tenants’ energy bills.

For landlords, non-compliance risks fines, reduced tenant demand, and falling property values. Additionally, mortgage lenders are increasingly favouring energy efficient properties, affecting lending criteria.

Practical Implications Across Landlord Profiles

• Single-unit landlords: Assess your property’s current EPC rating promptly. If below C, plan upgrades such as improved insulation, efficient boilers, or double glazing.
• HMO landlords: Upgrade costs can be higher. Prioritise common areas and individual units with the poorest ratings. Consider phased improvements over several years.
• Portfolio landlords: Conduct a portfolio-wide EPC audit to identify properties falling short. Use this information to budget and explore green financing.
• Accidental landlords: Obtain professional EPC assessments and advice early, as substantial work may be needed.

Financing Upgrades: Green Mortgages and More

Paragon Bank’s green mortgage products offer preferential rates for EPC A-C properties and enhanced new build lending. These can reduce financing costs and improve cashflow during upgrades.

Landlords should:

• Investigate green mortgage options with current lenders or specialist providers.
• Compare interest rates and terms against standard buy-to-let products.
• Consider potential government grants or schemes supporting energy efficiency improvements.

Steps to Take in the Coming Weeks

1. Review EPC ratings: Obtain or update EPC certificates for all rental properties.
2. Plan upgrades: Prioritise properties below EPC C and develop a timeline and budget.
3. Explore financing: Contact lenders about green mortgage options.
4. Engage professionals: Consult energy assessors, surveyors, or specialist contractors.
5. Monitor regulations: Stay updated on government changes or incentives concerning EPC requirements.

How Rentals & Sales Can Support You

We offer tailored portfolio reviews, compliance audits, and EPC benchmarking to help identify risk areas and prioritise improvements. Our pricing strategy advice considers energy efficiency trends to maximise rental income and capital growth.

Contact us to schedule a consultation and safeguard your investment ahead of the 2030 deadline.

Disclaimer: This article provides general guidance and should not replace professional legal or financial advice. Landlords should consult relevant experts to ensure compliance with current regulations.