Energy Performance Certificate (EPC) C requirements have overtaken all other concerns as the top reason landlords plan to sell up, according to new research by Pegasus Insight.

The firm’s latest report reveals that 38% of landlords intend to sell at least one property within the next 12 months — with energy efficiency rules cited more often than any other factor influencing that decision.

Although the Government has proposed that all private rented homes should meet EPC Band C by 2028 for new tenancies and 2030 for all tenancies, these targets are not yet law. Nonetheless, the uncertainty is already shaping landlord behaviour.

Pegasus Insight’s findings show that 42% of current rental stock in the private rented sector falls below EPC C, as many landlords struggle with the cost and complexity of required upgrades.

As highlighted by the NRLA and previously reported by Property118, the average cost of achieving EPC C is estimated at £6,100 to £6,800 per property. Government ministers have also acknowledged that landlords are permitted to increase rents to recoup these expenses.

“Energy efficiency rules are now a decisive factor in landlords’ business decisions,” said Mark Long, founder and director at Pegasus Insight. “With around half of rental stock still below the target threshold, the cost and complexity of upgrades are prompting many to rethink their portfolios.

This is a pivotal moment for the sector: the ambition to improve energy standards is welcome, but without clearer guidance and practical support, there’s a real risk that good landlords will simply choose to exit the market rather than invest.”

The data shows:

• 56% of landlords hold properties rated ‘D’;
• 20% own homes rated ‘E’, ‘F’ or ‘G’;
• Among larger landlords (11+ properties), 78% have an average of 9.2 properties below EPC C.

Overall, confidence in the sector remains subdued, with many landlords citing uncertainty over the timing, scope and costs of forthcoming EPC and MEES reforms as a major concern.