Landlords are facing an average bill of £11,713 per property to carry out the upgrades needed to meet the proposed Energy Performance Certificate (EPC) requirements.
Research from Pegasus Insight shows that 60% of landlords own at least one property that is below the proposed minimum EPC rating of C.
Among landlords who own properties rated below C, there is a growing willingness to invest in upgrades as 62% plan to make the necessary improvements, an increase of 13% from the previous quarter.
While more than two-thirds of landlords expect to use savings to cover at least some of the costs, many are exploring alternative financing options.
Nearly a quarter hope to access government grants or support schemes, while others expect they will have to borrow more through further advances or by releasing equity.
The findings indicate a significant financing need as landlords look to lenders for support.
The pursuit of higher energy standards is not only driven by regulations.
Separate tenant trends research from Pegasus Insight shows that 44% of tenants consider EPC ratings to be an important factor when choosing a home.
Pegasus founder and managing director Mark Long says: “For many landlords, the question is no longer whether homes should become more energy efficient, but how those improvements will be financed.
“Most landlords are willing to invest, but the costs are significant.
“Many landlords are actively seeking financial support to bridge that gap, creating a significant opportunity for lenders to help unlock investment in the private rental sector.
“The most successful solutions are likely to be those that make financing renovations simple, accessible and commercially viable for landlords.”