Shawbrook, the specialist UK savings, development finance, and bridging finance bank, has published data from its research, which is part of its Changing Face of Buy to Let Report. This data shows that landlords are already starting to improve the energy efficiency of their properties.
This is ahead of the new rules, coming into force in 2025, which will mean that rental properties with an EPC rating of D or below will be prevented from taking on new tenants.
According to the research, 17% of landlords and 22% of portfolio landlords (those with 4 or more properties), have taken steps to improve the energy efficiency of their property. This includes actions such as replacing boilers and heating systems, replacing windows and installing white goods, all of which can positively impact the property’s EPC rating.
Tenant demand can be also boosted by becoming more energy efficient, with one in ten private renters saying they would stay longer in their current property if changes were made to benefit the environment. Rent increases were also seen as acceptable by tenants if energy efficiency was improved, with 18% of tenants happy to pay more if new windows were installed, 15% would pay more with a new boiler and heating system and 10% happy with a rent increase if solar panels were installed.
Those in rented accommodation stand to save money in energy efficient properties with the predicted increase in energy bills in 2022.
For older properties, it can be more challenging for landlords to improve energy efficiency and thereby the EPC rating. This may result in some properties being ‘unrentable’ and ‘unsellable’ by 2025.
Data from the Ministry of Housing, Communities and Local Government shows that nearly 14 million homes in England and Wales currently have an EPC rating of D or lower.
John Eastgate, MD, Property Finance at Shawbrook Bank, comments:“For many property owners in the UK, getting their property to a C rating is going to take a lot more than simply installing a new boiler.
The reality is that for older properties – some of which may be listed- it will be an expensive exercise to make the necessary changes.
It’s welcome news that landlords are already acting ahead of the rule change in 2025 and it’s completely right that we should all be considering how to make our properties more energy efficient and environmentally friendly.
Some owners, however, will need support from both lenders, and the government, to make these changes financially possible.
Without this, we risk a substantial part of the private rental sector becoming unrentable and therefore unmortgageable and unsellable in 2025.
With home ownership still out of reach for many this could leave us with a shortage of quality homes to rent.
More needs to be done to help property owners with these changes and at Shawbrook we are working behind the scenes to look at how we can be a part of providing that support.”
Original article featured here…
Shawbrook recently reduced rates across its commercial heavy refurbishment product range. The new rates are 0.60% per month at 50% LTV, 0.70% at up to 60% LTV and 0.80% at up to 70% LTV.