If renovation work continues at the current pace, landlords will miss their green renovation targets by 18 years, according to a Hamptons study.
It will take until 2042 for all rental apartments to achieve an A to C rating in their energy certificate, says the real estate agent, and not until 2030 as the new Labour government is aiming for.
So far this year, 39% of energy performance certificate checks for existing rental properties have resulted in the property being upgraded to a higher category, compared to just 34% ten years ago.
The data also comes at a time when average rents for newly let homes in the UK have risen by 5.7% to £1,354 a month over the past year, with prices in the north of England rising three times as fast as in London.
Last week, Miatta Fahnbulleh, Parliamentary Under-Secretary of State at the Department of Energy Security and Net Zero Energy, said plans would be reinstated for privately rented properties to achieve Energy Performance Certificate C standard by 2030.
Previously, former Conservative Prime Minister Rishi Sunak had abandoned or withdrawn this and a number of other eco-targets last September in the face of the cost of living crisis.
Hamptons says: “This means it would take until 2042 for all rental properties to comply with Labour’s proposed new rules.
“Although this is later than the government’s 2030 target, it still represents an acceleration compared to the 89 years it would have taken if the development had taken place in 2016.
“This is partly because some landlords have already undertaken energy-saving renovations to implement the Conservatives’ plans that were abandoned last year.”
The company adds that so far this year, 55% of all landlord properties issued with a new energy performance certificate achieved a rating of C or better, compared to 48% of owner-occupied homes.
According to official figures, the average energy efficiency rating of a residential building in England and Wales is Band D.
Aneisha Beveridge, head of research at Hamptons, said: “Successive changes to proposed energy efficiency regulations have changed the playing field for landlords, some of whom face costs that could run into the tens of thousands of pounds.
“In order to achieve the government’s target for 2030, the same number of households will have to be renovated to improve energy efficiency in the next five years as in the last 30 years.”
The estate agent also adds that the 5.7 percent annual rent increases nationwide were boosted by double-digit increases in the north of England.
It is noted that rents outside London have risen by 7.2% year-on-year, due to an annual increase of 10.3% in the North of England, where rent increases have accelerated since March.
In the north – the north-east, north-west and Yorkshire & Humber – rents are rising three times faster than in London. There, the average rent for a new lease rose 30 percent year-on-year to £2,355 per month. In July last year, the capital recorded an increase of 13.9 percent.
Hamptons’ Beveridge adds: “Rental growth continues to outpace inflation, although the pace of growth has moderated over the past year.
“However, there are also signs that the strong inventory increases since 2023 are slowing down. In January, inventories were 34 percent higher than in the same period last year, but they are now 22 percent higher.”
“A decline in the level of existing stock is likely to boost the pace of rental growth again, especially given that in the longer term there are about a third fewer rental apartments than there were five years ago.”
