With around four years until all new private rented tenancies to be in properties with at least an Energy Performance Certificate (EPC) rating of "C," new research from The Mortgage Works (TMW) revealed a lack of confidence among landlords about being able to meet the necessary criteria on time.
Lack of awareness of the new energy efficiency requirements cited as a key issue
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.
More than a third of landlords (35%) are unconvinced that they will be able to reach the new energy efficiency standards with their properties. This worry is driven by a lack of awareness of the new demands, as well as worries over how to finance them.
An array of challenges are affecting landlords ability to make the required changes
When asked what their biggest problem was, more than half of the landlords who have attempted to meet the new EPC standards mentioned physical limitations on the property (51%). Other issues included:
- 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%
Challenges affecting landlords with portfolios of all sizes
Respondents were asked if they would require capital for the required modifications. A greater percentage of landlords that were aware of the criteria had a decent notion of what needed to be done to satisfy them, but 61% said they would need to spend money in order to make the necessary changes with almost 1 in 5 landlords saying that a lack in funds is their biggest challenge.
The Mortgage Works Green Further Advance
To help with this The Mortgage Works have launched an innovative new product available to existing TMW landlords called Green Further Advance and allows loans of between £,2500 and £15,000 over either two or five years, capped at the normal 75% LTV.
To assist with this, The Mortgage Works has introduced a unique new service for existing TMW landlords called Green Further Advance, which offers loans ranging from £25,000 to £15,000 capped at the standard 75% LTV. The full advance must be spent on acceptable energy efficiency improvements such as:
- Solar panels
- Traditional insulation
- Air or ground source heat pumps
- Cavity wall or loft insulation
- Investment in rain water harvestation
- Replacement windows
- Upgrading of existing utilities
- Pipes and boiler insulation
- Boiler upgrade
- Small scale wind turbines
- Electric car charging stations
We can help
As a whole of market broker, this is just one of the deals that The Mortgage Stop can access to help landlords clients, from across the whole of the market. If you would like to know more you can call us on 01794 379 379 or email us at firstname.lastname@example.org.
Your property may be repossessed if you do not keep up repayments on your mortgage. Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority