In a recent analysis conducted by Savills, it has been found that approximately 2.9 million homes in the private rental sector require upgrades to meet the forthcoming regulations mandating all properties to achieve an EPC C rating, with the aim of improving energy efficiency within the housing sector.

The research indicates that the total cost of these necessary upgrades could reach £30 billion. However, the government's proposed £10,000 cap per property could potentially limit the cost to £25 billion.

Currently, the minimum EPC requirement across England and Wales is set at E. Plans to elevate the requirement to EPC C by 2028 may now be subject to postponement. Should the proposed regulations take effect, over half of the 5.7 million homes in the private rental sector would require upgrades.

Lucian Cook, Savills head of residential research, remarked, "This analysis underscores the magnitude of the challenge facing the private rented sector at a time when many landlords struggle to cover their costs." Cook also pointed out that while delaying the implementation might provide temporary financial relief to landlords, other factors such as prevailing mortgage costs and the termination of assured shorthold tenancies could compel investors to reassess their property holdings, potentially limiting supply and driving up rental prices.

The issue is particularly evident among older housing stock. Of the 728,138 EPC certificates issued for private rental homes in 2021-2022, 51% remained below the EPC C level, showing an improvement from 73% in 2016-2017. Moreover, 71% of homes built prior to 1950 received an EPC below C in 2021-22, while only 12% of properties built after 1995 require upgrades.

The costs of upgrading vary significantly, depending on the current EPC rating of the property. For instance, a property currently rated EPC D would require an estimated £8,807 for a full upgrade to EPC C, whereas a property currently rated EPC G would necessitate an estimated £27,366.

"Funding these works will be challenging," commented Cook, highlighting the considerable costs of large-scale improvements such as solar PV and heating, solid wall, and solid floor insulation. He further emphasized that older homes not only require more upgrades but also entail more extensive and expensive work to achieve the EPC C standard.

Addressing the task of upgrading nearly three million homes within the private rental sector is a substantial undertaking, signifying the efforts required to foster energy-efficient living. As the regulations loom, stakeholders must prepare for a transformative wave, seeking a balance between financial feasibility and sustainable progress. With determination and innovative solutions, the housing sector may rise to the occasion, cultivating a more energy-efficient and environmentally conscious landscape for future generations.