As we’re sure most of you will be aware, a few weeks ago, Prime minister Rishi Sunak announced he would be scrapping the impending EPC regulations for landlords. Quite the U-turn!
Previously, the expected legislation was that properties would need to be an EPC rating of A-C on newly tenanted properties by 2025, and on existing tenancies by 2028.
Whilst this announcement may provide some breathing space for some landlords and free up capital in the short term, particularly during the current cost-of-living crisis, it has sparked anger for many who have already spent money making changes to their properties.
According to a recent survey from Shawbrook, 80% of landlords had already prepared for the 2025 deadline. This included 30% who said their properties already met the requirements, and 50% who had plans in place to improve EPC ratings before 2025. Nearly half have spent between £500 and £20000 on property improvements in the last year.
Generally, those purchasing BTL and residential properties are prioritising the newer, and more energy efficient, or at least those deemed as easy “fixer uppers”. This is largely to try and reduce running costs, as energy bills in particular remain high, as well as getting ahead on potential legislation and a genuine desire to do the right thing regarding climate change.
This means that having properties with a good EPC rating will help to attract tenants and reduce void periods, and improve future saleability. Policies may change, but climate change is going nowhere. Energy efficient buildings will remain pivotal to net zero targets, which the Government say they are still committed to. Based on this, many landlords have said they will go ahead with planned improvements.
We don’t have a crystal ball, but it’s important to be prepared for any future changes to legislation which may be brought in further down the line, or be put back on the table with a change of Government. This makes decisions on refinance difficult. Without a set timeframe, it can be hard to know how long you may want to take a deal for, particularly if there will be early repayment charges. Keeping informed is key!
The good news is that BTL lenders have been starting to reduce rates and are coming up with some really innovative products. There are also BTL and residential lenders with specific “green” products and tools to help with checking and improving EPC ratings. We can help guide you in the right direction.
If you would like advice on refinancing your properties, whether that be for improvements or another purpose, or are looking to purchase a new rental property, Ingard can help!
Call 01702 538800 or email us at enquiries@ingard.co.uk to get in touch.
