SBK Lettings Land Lord Times February Issue

LANDLORD TIMES

February 2026

GOVERNMENT REVISES ENERGY

EFFICIENCY RULES FOR PRS

Changes to proposed energy efficiency rules have been announced for the private rental sector.

The government outlined the key updates in its Warm Home Plan. It follows extensive campaigning by

the National Residential Landlords Association (NRLA) which had argued the previous proposals were “unrealistic”.

The government confirmed its intention to ensure all rented homes which are able, should

achieve an Energy Efficiency Rating (EPC) of at least C across two metrics by October 2030, unless their property has a valid exemption.

Also announced was the planned cap on landlord investment is now

£10,000, down from the £15,000 originally proposed.

Landlords will be able to choose between the smart or heat metrics, to choose what will work best for their property. Properties which will meet EPC C before October 2029 will be considered compliant with the regulations until that EPC expires, even after new EPCs are introduced. A low-value property exemption will also be introduced, which will lower the spending cap where £10,000 would represent 10% or more of a property’s value. The government will be consulting on the band boundaries for new EPCs in England and Wales, to give what it hopes will be greater clarity on the sorts of upgrades renters can expect to see. The proposals include fabric, heating and energy systems measures, such as solar PV and home batteries and smart technologies.

To help landlords with the cost of the upgrades and to ensure compliance with the new regulations, funding support will be available including continued access to Boiler Upgrade Scheme (BUS) grants. Personal investments can be eligible as an allowable

expense and can be tax deductible.

Ministers have said landlords can start upgrading homes immediately as improvements made from now on will count towards the property’s cost cap in 2030 and EPCs commissioned in their current format will count towards compliance until they expire.

The government hopes the changes will make improving rental housing stock more achievable for landlords.

In further good news for landlords, the government has announced a delay to the implementation of the Decent Homes Standard.

In a statement it said: “The new DHS will apply from 2035 to both the social and private rented sectors.

“This timeframe has been chosen to allow landlords time to implement other regulatory changes, such as those introduced in the Renters’ Rights Act 2025 and to support the supply of new secure and affordable homes.

“However, we are clear that landlords should not delay all action until the end of the implementation period.”

SBK Lettings managing director,

INVESTING IN A BUY-TO-LET PROPERTY?

Rebecca Dean said: “We welcome the news landlords will be given greater clarity and funding to help them achieve the government’s EPC targets.

“We also welcome the fact the government has listened to campaigners and has improved the measures initially proposed.

“However, there are many rental properties within the sector which are old and not easy to repair and the upgrades will be both substantial and therefore costly. These types of properties will probably need more than £10,000 to be spent to achieve the required target.

“We will continue to lobby the government to try and get more funding support for those landlords with rental accommodation which will cost more than the £10,000 cap as without this financial help, many will simply leave the sector, something no one wants to see.

“As always if any of our landlords would like advice in accessing the grants or more information, please do not hesitate to get in touch as we’d be happy to help.”

At SBK Lettings, we pride ourselves in delivering an exceptional, professional and personal service to both our landlords and their tenants. Our fully trained property managers have a wealth of experience with property maintenance and will aim to care for our clients’ properties at the highest level whilst endeavouring to achieve the best possible return from their investment. For more information please call us and one of our team will be more than happy to help.

Rebecca Dean MARLA Managing Director - SBK Lettings

01789 867110

rebecca.dean@sheldonbosleyknight.co.uk

EPC refurbishments could cost

£20 billion

Upgrading England’s privately rented homes could cost landlords as much as £20 billion.

The estimate comes as the government says it wants all rental stock to reach an Energy Performance Certificate (EPC) rating of at least C by 2030.

Although landlords will be able to access grants, data analysed by Octane Capital suggests the total investment required could run into many billions of pounds.

The company analysed government data and found 50.1% of privately rented homes in England sit below the EPC C rating. This represents 2,479,757 properties in need of upgrading. At a typical cost of £8,017 per home, the total investment required stands at £19.9 billion.

Octane Capital’s research also found many older homes struggle to reach the C rating due to poor insulation, old boilers, single-glazed windows, lack of controls and outdated lighting.

These issues can be addressed with upgrades like better loft and wall insulation, new boilers, double glazing, smart controls and LED lighting.

Octane Capital’s CEO Jonathan Samuels said: “For many landlords, meeting the EPC C requirement won’t just come down to recognising what needs to be done, but having the ability to fund the work and deliver it efficiently, particularly where properties require more extensive upgrades.

“This is why refurbishment finance will continue to play such an

important role over the coming years, helping landlords access the speed and flexibility required to improve stock, manage costs, and ensure properties remain compliant and fit for purpose ahead of the 2030 deadline.”

SBK Lettings senior lettings manager Josh Jones said: “This will be of enormous concern to landlords particularly those whose properties are older and require more extensive modernisation and refurbishment to bring them to the required rating.

“We would urge any of our landlords who would like information or help with accessing grants or any other aspect of these proposals to get in touch. We’d be happy to help.”

Rental yields rise across the Midlands

Landlords across the Midlands recorded solid rental yields through the final quarter of last year.

Data shows average yields rose by 0.3% annually and 0.2% quarterly to reach 7.7% across England and Wales.

Fleet Mortgages’ latest Rental Barometer said this reflects a private rental sector where tenant demand remains high, supply continues to lag behind need and rental values are rising in most regions.

Although the north east delivered the strongest performance, with an average yield of 9.6%, both the East and West Midlands reported year-on-year increases to go above the England and Wales average. The West Midlands increased from 6.6% in Q4 2024 8.1% in Q4 2025 while the East Midlands had a more modest increase from 7.7% in Q4

2024 to 8% in Q4 2025.

Fleet said the wider rental yield picture showed consistent strength, with landlords benefiting from good tenant demand, coupled with rising rental values.

The figures are in contrast to those from the Office for National Statistics (ONS) which show a slowdown in average UK monthly private rents. The ONS figures show average rents reached £1,368 in December 2025, just a 4% increase over the previous year.

The annual growth rate has gone down from 4.4% recorded in November 2025, the lowest inflation rate in over two and a half years.

England saw average rents rise to £1,424, a 3.9% increase of £54 compared to December 2024.

SBK Lettings senior lettings manager Josh Jones said: “The

yield figures represent good news for our landlords. They show a market where tenant demand is still high and rents are holding firm, albeit down slightly on a year ago.

“It is particularly pleasing to see the East and West Midlands performing well compared to the rest of England and Wales.

“At SBK Lettings we still have plenty of committed tenants and demand remains strong across our patch.

“We are also seeing our landlords becoming more confident with portfolio sizes slowly starting to increase. This is good news for the sector which desperately needs more, good quality, committed landlords.

“If any of our landlords are keen to expand their portfolios please come and talk to us about our investment opportunities.”

Tenant demand remains historically strong

In good news for landlords and investors, demand for rental accommodation remains “historically strong”.

The latest Landlord Trends research reveals 30% of landlords say demand is “very strong”, and 38% “quite strong”.

Just 5% of landlords report weak demand, underlining the continued resilience of tenant demand across most parts of the market.

However, the figures, from mortgage market specialist Pegasus Insight, shows tenant demand in the private rented sector has softened slightly over the past year.

Landlords operating in the north east reported the strongest level of demand in Q2 (71%), while the East

Midlands generated the weakest (60%).

The incidence of voids increased this quarter, with 44% of landlords reporting they had experienced an empty property at some point during the previous 12 months, up 7% on the previous quarter.

Pegasus Insight’s founder and managing director Mark Long said the findings suggest the rental market may be moving into a more stable phase.

He said: “Demand remains strong by historical standards, but we are starting to see a shift away from the exceptionally tight conditions of recent years.

“Affordability is now playing a bigger role in shaping behaviour on both sides of the market. Tenants

are more cautious about moving, while landlords are balancing rising costs, regulation and the realities of what renters can afford.”

SBK Lettings regional lettings manager Jo Egan said: “Our data tells us there is no let-up in tenants looking for rental accommodation. This is great news and gives a degree of confidence to our landlords who have properties to rent and want to stick with the sector.

“Although the supply and demand imbalance is still present, signs are this could ease which will hopefully allow rents to become more stable.

“If any of our landlords would like advice on appropriate levels of rent, please do get in touch with us as we’d be happy to help.”

PRS dominated by one-property landlords

The private rental sector (PRS) is made up predominantly of landlords who own just one rental property.

Data from the latest English Private Landlord Survey (EPLS) 2025 found a further 38% own two, three or four.

Only 17% own five or more properties – although these account for almost half of all tenancies.

Commissioned by the Ministry of Housing, Communities and Local Government (MHCLG) and conducted by the National Centre for Social Research (NatCen), the report provides insights into the practices, portfolios and interests of PRS landlords in England.

It identified six distinct types of landlords within the EPLS sample and assessed how common each landlord profile was.

The largest of the six types were small-scale retired landlords (31%) who typically owned modest portfolios of between one and two and viewed their investments as a supplement to their retirement funds.

Small-scale, short-term investor landlords made up 27% of the sample with landlords who are small-scale investors for retirement accounted for 24%. Both tended to have buy-to-let mortgages.

Moderate-scale business and investor landlords and large-scale business landlords made up 10% of the sample. Corporate landlords made up just 7%, renting out property as part of a company rather than as an individual.

When it comes to future intentions, corporate landlords (26%) were the most likely to report they were planning to increase their portfolios. Expanding portfolios for other groups was rare at between only 2% and 10%.

For investors who planned to decrease the number of properties they let, or leave the sector altogether, recent tax and legislative changes were cited as a reason for this by 81% of moderatescale business and investor landlords and 78% of large-scale business landlords.

Elsewhere a survey by Paragon Bank found two thirds of landlords plan to buy more properties through limited companies.

The survey found all those aged 25 to 34 intended to use limited companies with 82% of those aged 35 to 44 doing the same.

The older the age group, the less likely a landlord would be to buy through a limited company.

It also revealed 32% of landlords intended to transfer properties to a limited company structure in future.

Lettings manager at SBK Lettings, Sophie Biddle, said: “These figures illustrate the diversity of landlord types within the private rental sector but show clearly it’s the smaller investors who are the majority and it’s this group which the sector needs to encourage to stay.

“What is encouraging is those landlords who are committed are thinking positively about how to do so in a way which protects them and their investments. Thus it is no surprise to see the rise in popularity of limited companies as a way of doing just that.

“However, while we celebrate those landlords who are sticking with the sector, it’s disappointing to see plenty who aren’t and it’s no surprise to see recent tax and legislative changes are the reasons.

“There are undoubtedly tricky times ahead with the Renters’ Rights Act coming into effect in May and changes to the taxation policy, but with the right help and support from agents such as SBK Lettings, it is still a great way to invest.

“If any of our landlords would like advice on how they can successfully increase their portfolio, please do get in touch as we’d be happy to help.”

LUXURY RIVERSIDE

£188,000 STARTING PRICE GROSS SHORT TERM LET YIELDS UP TO 13%

Heritage Meets Modern Living

A stunning riverside development in the heart of Market Harborough’s Welland Quarter.

• Allocated parking space

• Ground floor apartment

• Modern and well presented

• Convenient location and close to town

• Potential rent value of £825 pcm

• EPC - C

Court, Market Harborough

• Luxury 1 and 2 bedroom riverside apartments

• Walking distance of the train station

• Ideal short term lets with high demand

• Close to the town centre and all amenities

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations. To follow Sheldon

Gross yield of 8.6% £115,000

Gross short term let yields up to 13% £118,000

London Road, Coventry

• A company sale offering excellent returns on investment

• 15 double and 1 single self contained high quality studios within walking distance of Coventry city centre

• Modern self contained living spaces

• Fully Occupied with existing tenancies in place at good market rents

• EPC - C

Manor Drive, Loughborough

• Three-bedroom terraced property

• Ideal investment or development opportunity

• Spacious plot size

Price on Application

• Prime renovation/development opportunity

• Yields based upon auction guide price

Gross yield of 9% £125,000

For aution properties click logo

• Spacious semi-detached property

• Three well-proportioned bedrooms

• Ideal rental investment

• Desirable location of Barkby, Leicester

• Yields based upon auction guide price

For aution properties click logo

£150,000

• End-terraced family home

• Ground floor WC and upstairs bathroom

• Prime Earlsdon location

• Finham Park and Earlsdon Primary catchment

• Current rent value of £1,200 pcm

• EPC - E

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

£175,000

Sheldon Bosley Knight is delighted to offer an off-market, exclusive opportunity of either individual plots or multiple unit discounted packages from developer David Wilson Homes. With various property styles there is plenty to suit your investment needs.

> Luxury three- and four-bedroom homes at Heritage Grange located just a short drive from Leamington Spa and Warwick.

> Built within 14.3 acres of green space, enjoy scenic walks and a family-friendly play area.

> Energy efficient homes with solar panels and EV car charging points.

> 20 minute drive to Leamington Spa and Warwick town centres with a regular bus service available.

> Close to the M40 motorway with easy links to Birmingham and Oxford.

> Discover countryside living with city convenience.

*Discounts and exclusive multiple unit packages are only available

For more information please contact Jack Richardson and the New Homes Team on 01789 333 466

• Redundant agricultural buildings extending to approximately 1,800 square feet

• 8.26 acres of Grade 3 pastureland with excellent road frontage

• Excellent connections to surrounding towns such as Moreton in Marsh and Shipston on Stour

• Suitable for amenity or other alternative uses STPP

For further information please email rural@sheldonbosleyknight.co.uk or call the Rural Team on 01608 661666 (option 3)

• Development potential STPP

• Investment opportunity

• Centrally located close to the town centre

Large car park

£200,000

£600,000

• Prominent high street location

• Investment opportunity

• Gross internal area: 434m (46,802 sq ft)

• Passing rental value: £47,000 per annum

• Leased to a national covenant

• Development potenial (STP)

• Stratford town centre

• Freehold • EPC - D

Court Lane, Evesham

• Modern, two-storey office extending to approx. 1,575 sq ft

• Let to Raycom Ltd on a five-year FRI lease from June 2022, providing secure income

• Current rental £14,500 per annum

• Bright office space with suspended ceilings, LED lighting, partitioned meeting rooms, kitchen and WC

• Situated in Abbey Lane Court, an established business park with on-site parking and easy access to A46 and Evesham town centre 9 Abbey

• Part exchange considered 9 Abbey

• Planning permission granted to split flat into two, one-bedroom flats

• Highly desirable location

• Residential accommodation to be vacant upon sale

• Current rental £20,000 per annum

Gross yield of 2.4% £825,000

LOCAL BRANCHES ACROSS THE MIDLANDS