The latest research by Benham and Reeves found it will take the average landlord over 26 years to recoup the costs of upgrading a sub-C EPC rated property.
The Labour Government aims to enforce a minimum EPC rating of C for all private rental properties by 2030.
Research from Zero Deposit indicated that the total upgrade cost for UK properties could exceed £21bn for landlords.
Benham and Reeves analysed the cost of upgrading a property to an EPC rating of C or above in England and compared this against expected annual cash savings from improved energy efficiency.
The average cost of upgrading a buy-to-let property to meet the rating was £7,396, which is expected to create an annual energy bill saving of £280.
Consequently, it will take landlords an average of 26.4 years to recover these costs.
In London, landlords faced the longest wait, with the average upgrade cost sitting at £7,807 and expected annual savings of £247, leading to a recovery period of 31.7 years.
Landlords in the East Midlands will see a recovery time of 30.8 years, followed by the North East (29.8), East of England (27.0), North West (26.9), South East (25.3), Yorkshire & Humber (25.3), and West Midlands (24.2).
Even in the South West, where annual savings from an EPC upgrade are the highest at £365, the average upgrade cost of £8,201 results in a recovery time of 22.5 years.
Marc von Grundherr, director of Benham and Reeves, said: “Since taking power, our new Government has launched a range of initiatives designed to win the vote of the average tenant without much thought for the wider rental market and plans to make EPC requirements of a C mandatory are yet another example of this.
“Insisting that landlords make such a sizable investment into the energy efficiency of their property for what is, let’s face it, a very marginal improvement, is only likely to act as another deterrent to investors.
“Especially when you consider that it would take almost 27 years to recoup this investment on the money saved on energy bills and the average landlord only remains in the sector for a decade.
“What’s more, current plans provide no guarantee that carrying out any work will actually improve an EPC score and when you also consider the lack of tradespeople and the high prices they’re commanding as a result, it’s no wonder many landlords may think twice about their future within the sector.
“Those who do remain will inevitably have to pass any cost incurred in meeting an EPC C rating onto the tenant in the form of higher rent, further exacerbating the current issue of rental market affordability.”
