Landlord’s Lack of Confidence in the New EPC 'C' Regulations
The Mortgage Works (TMW) have recently published a report stating the lack of confidence Landlord’s have in the ability of getting their properties to EPC ‘C’ standard in time for the new legislation.
Current legislation in England and Wales requires Buy To Let properties to have at least an EPC rating of ‘E’ or above. However, in order to improve the energy efficiency of rental properties, the Government wants to increase the requirement to a ‘C’ rating for all new tenancies by 2025 and for all existing tenancies by 2028.
In order to prepare for the new legislation, many lenders have started increasing the minimum EPC rating for some of their products, especially the higher Loan To Value (LTV). While others are offering preferential rates for EPC ratings between ‘A–C’.
TMW’s research shows of around 750 landlords, more than a third (35%) say they’re not confident they’ll be able to bring their properties up to the required efficiency standard. This is not only due to lack of available capital but also a lack of awareness regarding what it takes to achieve that ‘C’ rating.
TOP 10 CHALLENGES FACING LANDLORDS
- Property constraints (i.e limitations on what is possible for the building) - 51%
- Access to the property whilst tenants are renting - 44%
- Level of disruption required to carry out the work - 44%
- Limited payback on any investment - 44%
- Limited tangible benefit to the tenants - 35%
- Finding reputable trades people - 34%
- Finding available trades people - 30%
- Hassle of managing the extra work - 27%
- Knowing what is required/appropriate - 27%
- Lack of funds - 27%
Landlords with larger property portfolios were more likely to face potential challenges than those with a smaller number of properties. However it is not all doom and gloom as one in ten (10%) don’t anticipate facing any challenges.
GREEN MONEY
More than six in ten (61%) landlords say they will need to spend money to get their properties up to EPC ‘C’ standard. More than one in ten (14%) of them say will need to spend all of their rental income, and perhaps even more than that, on making the improvements to their properties. However, a larger proportion of landlords do not feel they will need to spend as much with nearly a third (29%) saying they will need to spend less than 30% of their annual rental income. Nearly one in five (17%) will not need to spend anything at all.
PLANNING AHEAD
Even if the money is available, around one in ten (11%) landlords admit they have no idea of what work is required and do not know where to start. Whereas around four in ten (41%) say they have either a good or clear idea on what to do.
That figure increases to more than half (55%) of those with 20 or more properties in their portfolio.
No matter what category you fall into, it is important to start thinking and planning now to ensure your rental properties meet the minimum requirements by the set dates, otherwise landlords could face a penalty up to £5,000. Landlords- New EPC Regulations 2025 – Gov UK
SO HOW CAN BROOKLYNS FINANCIAL HELP?
So whether you have any questions on what works will need to be done to increase the EPC standard, or need to raise funds to carry out the work, then we are here to help you every step of the way. Just give us a call 01628 564631 or email us info@brooklynsfinancial.co.uk
Please note your mortgage is secured on your property. Your home may be repossessed if you do not keep up repayments on your mortgage.
Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.
The information contained within was correct at the time of publication but is subject to change.
