Landlords eye rent rises as supply crisis threatens home improvements

More than half of landlords will increase rents to cover energy efficiency improvements, a survey has shown, after the cost of eco- upgrades drastically increased.

Investors now need to shell out thousands of pounds more for mandatory green improvements because of the escalating supply chain crisis and exorbitant energy costs, experts have warned. All newly let rental properties must have an Energy Performance Certificate rating of at least band C by 2025, and by 2028 for existing lets, under government plans.

Landlords who have made green improvements spent £8,900 on average, according to Shawbrook Bank. However, the bank’s Emma Cox warned that labour and material shortages would increase bills for landlords yet to start the work. She said: “Where usually three to six months was advised as a timescale for improvements, the supply chain crisis has pushed this contingency up to nine to 12 months. “Likewise, mortgage brokers have always suggested landlords keep 10pc of rent aside for unexpected costs, but this buffer is now more like 20pc to 25pc. We expect tenants could be caught in the crossfire as landlords seek to recoup some of the costs.” Trade barriers after Brexit and a pandemic- fuelled renovation boom have crippled the construction supply chain and triggered steep price rises and huge waiting times for work to be done. Official data showed the cost of repair and maintenance of a scale likely to be required for energy improvements jumped by 21pc in the year to the end of January.

Allan Wilen of Glenigan, a construction market analyst, said the impact of the conflict in Ukraine on energy prices would accelerate the cost of renovations. “There is a lot more pressure coming down the track. These will feed through relatively quickly to manufacturers before being passed to landlords and then renters,” he said.

Noble Francis of the Construction Products Association said materials that were energy intensive to make – such as steel, bricks, concrete and glass – would see the largest jump in price.

He added: “A big supply issue for energy efficiency works is a global shortage of semiconductors and this has affected the supply of electrics, smart systems, energy- efficient boilers and energy-efficient white goods.”