£19.9bn of PRS refurbishment required
£19.9bn of refurbishment investment required to bring England’s private rented homes up to EPC C by 2030
Jonathan Samuels, CEO of Octane Capital, believes that despite the Government extending the deadline for all private rental stock to meet an EPC C rating from 2028 to 2030, refurbishment finance will remain key in helping landlords meet this deadline, with an estimated £19.9bn needed to ensure all privately rented homes in England are up to standard in four years time.
Octane Capital analysed Government data on the percentage of private rental dwellings that currently have an EPC rating below Band C, before applying this proportion to private rented sector dwelling stock volumes to reveal just how many homes are in need of improvement. Octane then looked at the average cost of the improvements required to bring a home up to an EPC standard of C, in order to calculate the total cost of improvements required across the private rented sector.
The research shows that, across England, 50.1% of privately rented homes currently sit below the Government’s minimum EPC C threshold, equating to an estimated 2,479,757 properties requiring improvement.
Based on an median upgrade cost of £8,017 per home, this means the total refurbishment investment required to bring the sector up to the Government’s minimum standard by 2030 stands at £19.9bn.
London is set to require the largest total refurbishment spend in order to bring private rental stock up to EPC C, with the total cost of improvements across the capital coming to £4.3bn.
The North West and South East also face substantial improvement costs, with an estimated £2.3bn required across the North West and £2.2bn required across the South East.
The North East is thought to require the smallest overall refurbishment investment, with the total cost of improvements across the region coming to £503m.
Older homes in particular can struggle to achieve stronger EPC ratings due to a number of common issues, including inadequate loft or wall insulation, ageing or inefficient boilers and heating systems, draughty single-glazed windows, a lack of thermostatic controls, and outdated lighting.
In many cases, these problems can be addressed through targeted upgrade works, such as topping up loft insulation, installing cavity wall insulation where suitable, upgrading to a modern condensing boiler, fitting double glazing or secondary glazing, adding smart heating controls such as thermostats and TRVs, and switching to LED lighting throughout.
With the scale of improvement required now clearer, refurbishment finance is set to play a vital role in helping borrowers fund and deliver these works efficiently, providing the speed and flexibility required to improve EPC performance without the delays and restrictions that can come with more traditional funding routes.
Jonathan Samuels, CEO of Octane Capital, commented:
“While the Government has extended the deadline for the private rented sector to reach EPC C, this research shows that the scale of refurbishment required remains substantial, with close to £20bn worth of improvements needed across England alone.
For many landlords, meeting the EPC C requirement won’t just come down to recognising what needs to be done, but having the ability to fund the work and deliver it efficiently, particularly where properties require more extensive upgrades.
This is why refurbishment finance will continue to play such an important role over the coming years, helping landlords access the speed and flexibility required to improve stock, manage costs, and ensure properties remain compliant and fit for purpose ahead of the 2030 deadline.”
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