Energy rules driving landlord sell-offs as 42% of rental stock falls short of EPC ‘C’
Landlord research carried out by mortgage market specialist Pegasus Insight shows that the government’s proposed Energy Performance Certificate (EPC) regulations are now the leading reason landlords plan to sell, highlighting the growing impact of energy policy on the private rented sector.
The latest Landlord Trends report (Q2 2025) reveals that 38% of landlords intend to sell at least one property in the next 12 months, with energy efficiency requirements cited more often than any other factor influencing their decision to divest. This marks a clear shift from earlier waves of research, when tax and interest rates dominated landlords’ concerns.
The findings also underline the scale of the compliance challenge: 56% of landlords have property rated ‘D’ and 20% have property rated ‘E’, ‘F’, or ‘G’. On average, 42% of a landlords’ portfolio does not currently achieve an EPC of ‘C’ or above. Larger landlords are most likely to be impacted, with 78% of 11+ property landlords having on average 9.2 properties that have an EPC rating of ‘D’ or below.
Mark Long, founder and director at Pegasus Insight, said: “Energy efficiency rules are now a decisive factor in landlords’ business decisions. With around half of rental stock still below the target EPC 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 report also shows that landlords’ confidence about future regulation remains subdued, with many citing uncertainty over the timing, scope and cost implications of EPC and Minimum Energy Efficiency Standard (MEES) reforms.