Prime minister scrapped requirement for rental properties to meet an EPC rating of C in September

More than four in ten private landlords have cancelled plans to decarbonise their properties following the government’s decision to scrap an energy efficiency target for rental homes, according to a report by Lloyds Banking Group.

Research by the UK’s largest mortgage lender found 42% of landlords had abandoned their retrofit plans two months after Rishi Sunak rowed back on a requirement for all rental properties to meet a minimum EPC rating of C by 2028.

Over half, 52%, of landlords said they are now less likely to invest in energy efficiency improvements in the future, according to the study.

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Rishi Sunak at a business investment summit this morning

Lloyds Banking Group director of environmental sustainability Rebecca Heaton said the firm was concerned by the “inadequate” progress in decarbonising the UK’s 28 million homes.

“The UK has the oldest and draughtiest housing stock in Europe and progress is off track. The lack of progress in decarbonising our homes risks pushing critical net zero goals – and keeping global warming within the 1.5⁰C threshold – further out of reach,” she said.

The group said its report, which comes days before the start of the COP28 climate conference in Dubai, has highlighted “shortcomings” across the housing retrofit sector.

It also found just one in five homeowners felt able to pay for works to ensure their home is ‘net zero ready’ by 2035, with 49% put off by “prohibitive high initial costs” and a belief that there is a lack of financial support available.

Although nearly six in ten surveyed homeowners said it was important to decarbonise their homes by 2035, over two thirds had not taken any steps to make improvements in the last five years.

Over a quarter, 27%, of homeowners said they did not know where to start, while 22% said the inconvenience and hassle of building work had prevented them from getting the work done.

However, 96% of respondents who had made changes to their homes said they were pleased with the results, and 73% said their installations had performed at least as well as expected.

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Architect and television presenter George Clarke said UK homeowners were increasingly easter to upgrade their property’s heating and insulation.

But he added: “Despite this demand, today’s data shows just how many feel ill-equipped to do so – whether through a lack of financial means, or access to key information.”

“If COP28 can see the UK Government work together with banks and lenders on developing better support for households, there’s a chance this could unleash a wave of retrofit activity taking place in the UK, making our homes better for the environment – and warmer and cheaper to run in the long term.”

Sunak watered down a series of key climate pledges in September, introducing an exemption on the ban on gas boilers for poorer households and pushing back a deadline for selling new petrol and diesel cars.