All rentals will be required to have an energy-efficiency rating of at least a C by the end of 2028.
More than half (52%) of landlords with properties with an Energy Performance Certificate (EPC) of D or below are considering selling due to the rules requiring them to improve their rating, according to research from The Mortgage Works (TMW).
All rentals will be required to have an energy-efficiency rating of at least a C by the end of 2028.
Those with larger portfolios are more likely to have considered selling some or all of their affected properties, with 58% of those with between six and 10 properties saying they have done so, rising to 63% of those with 20 or more properties.
However, just 35% of landlords with one property said they have considered selling their property if they need to improve its EPC rating.
The same proportion (35%) of landlords with one property said its EPC rating was between D and G, meaning they will need to undertake retrofitting work to hit the required standard, whereas 52% said their property already meets the proposed requirements.
Those with four or five properties said they have an average of around two properties that need work.
This increases to four for those with six to 10 properties, seven for those with 11 to 19 properties and 12 for those who have 20 or more properties.
When asked what improvements needed to be made to improve the property, 37% said they needed to fit traditional insulation, while 25% needed to upgrade the boiler, and 24% said the work involved upgrading existing utilities.
Among those with 20 or more properties, 59% said they will need to fit traditional insulation, while more than a third (37%) will need a boiler upgrade.
Landlords were found to have an average of £15,579 set aside to cover unexpected costs with their rental properties. However, more than half (51%) have less than £10,000.
Although landlords with multiple properties have a larger sum set aside to deal with unexpected costs - £35,202 for those with 20 or more properties - the average amount they have per property was found to be less than those landlords with a small number.
Daniel Clinton, head of lending at TMW, said: “With currently less than four years before all new tenancies need to be in properties rated EPC-C or above, there is still more than two-thirds who need to undertake remedial work on at least one of their properties.
"Landlords are therefore understandably concerned about how they will both fund the work, find someone to do it and have it completed in time.
“The side effect of these concerns is that a significant number of landlords admit they are ready to give up and already considering selling properties.
"An unintended consequence of this sentiment could result in a backwards step in meeting the government’s target around climate change, for example, if these properties are taken up by the owner occupier market, where there are currently no minimum energy efficiency requirements.
"Working with the sector to understand how best to help landlords improve the energy efficiency of their properties and the timeframe within which they can do this may ultimately lead a better outcome for everybody.
“Financing is also key and while our research suggests landlords have money set aside to deal with unexpected costs arising from their properties, it may not be enough to also cover the energy efficiency improvements.
"That is why The Mortgage Works launched its Green Further Advance earlier this year, giving landlords access to funding at a lower interest rate than they would get on a standard further advance and helping reduce the upfront cost facing landlords as they try to meet the government’s deadline."
