Research from epIMS has revealed that more than a third of properties for sale have an Energy Performance Certificate (EPC) rating below Band C, climbing to 46% in some major cities.
The Government’s green initiatives require all privately rented properties to achieve an EPC rating of C or above by 2030.
Landlords who do not meet this standard face an estimated average cost of £8,000 to bring their properties.
The epIMS analysis of more than one million current market listings found that 33.8% of potential buy-to-let investments do not meet the proposed EPC C requirement.
In Wales, 50.1% of listings fell short, while Scotland stood at 45.7%.
England had a higher compliance rate, but still included 33.2% of homes failing to meet the proposed minimum, with ratings of Band D or worse.
Bradford had the least energy-efficient investment opportunities, with 46.2% of homes listed below an EPC rating of Band C.
Edinburgh (39.6%), Brighton (39.4%), Bristol (33.9%), and Nottingham (33.5%) also reported high rates of non-compliance.
London had the most energy-efficient market, yet 23.5% of homes still achieve an EPC rating of D or lower.
Craig Cooper, COO of epIMS, said: “Landlords have had to contend with a raft of legislative changes in recent years, the vast majority of which have dented the financial returns they see from their investment portfolio.
“The requirement to meet an EPC C rating will be the latest initiative that will require many landlords to make further investment, with the average cost of achieving such compliance coming in at around £8,000 per property.”
Cooper added: “A greener rental sector is, of course, a positive, however, the issue is that the Government takes a fabric first approach with regard to energy efficiency and that isn’t always the most cost-effective route for landlords.
“For example, small changes such as installing PV panels is far more affordable than internal or external wall installation, but could be just the strategy needed to achieve the C threshold.
“This mitigates the need for landlords to spend more than they have to, which in turn reduces the chance that these costs will be passed onto tenants in the form of rental increases, leading to a far less disruptive landscape for renters themselves.”
