green mortgages

Property investors should prioritise EPC ratings now

Focusing on the long-term goals of your investment can help property investors decide what to prioritise, and energy efficiency is now high on the agenda.

The Labour government has reaffirmed its pledge to ensure homes in the private rented sector meet minimum energy efficiency standards by 2030, in a bid to save renters hundreds of pounds a year on their energy bills.

This is all part of the country’s drive towards drastically reducing carbon emissions, and the built environment is a clear target, being the source of around 25% of the UK’s total carbon output. New homes are being built with higher energy performance certificates (EPCs) than ever, while there are also new incentives for retrofitting inefficient properties.

While the deadline may seem far away, and the goalposts could still change – as they did when the Conservatives scrapped plans to increase minimum EPC ratings in rental homes – property investors are nonetheless being urged to keep energy efficiency at the forefront of their minds now.

There is already evidence to suggest that tenants are becoming more discerning when it comes to the energy efficiency of their homes, and paying more attention than ever to EPC certificates. At the same time, property investors are also becoming increasingly interested in top-rated homes – leading to a rise in the number of investors looking at new-build properties.

Property investors “shouldn’t wait until last minute”

According to Steve Cox, chief commercial officer at Fleet Mortgages, there are a number of reasons why property investors should act now to improve energy efficiency standards in their portfolios. This may involve upgrading existing homes, or replacing older stock with newer, better quality properties that already reach the required standard.

The first reason is that, on a practical level, there may be large numbers of property investors and landlords with properties that require work to hit the top EPC ratings.

Steve Cox notes: “As we know, a large number of properties in the UK are not currently at A-C and it may well be they will require a fair amount of work in order to get them to that level.

“This could take time, and will take money and resource, and therefore starting that journey now will give landlords the best chance of meeting the requirement in the timescale.”

He adds: “If you leave it to the last minute, then don’t be surprised if the ability to hit A-C doesn’t happen before the deadline, especially if you consider that all those who are in the same boat are going to require a new EPC before the deadline to show they are at the required level.”

Grants are available now

A further impetus for landlords to act quickly is in order to make use of the potential grants that are available to property owners whose homes require work to secure an A-C EPC rating.

All existing EPCs will contain a section on what their property has the potential to achieve, and suggestions of what work might be required to get there.

Steve notes: “For example, when it comes to moving from D-C or above, it may actually not take much activity or indeed much money to be able to secure the higher rating. Conversely, the lower the EPC, the bigger the necessary readjustments might be.”

The government website contains more information about what grants might be available to both homeowners and buy-to-let property investors. More information is available here.

Green mortgages can help

A growing number of lenders are extending their range of products available that are linked to the energy efficiency of the property, as a way of incentivising people to do their bit in improving the country’s property stock.

For example, Fleet Mortgages is now offering a £1,000 cashback incentive for landlord borrowers who can bring their property’s EPC rating up to A-C within the fixed term of their current mortgage. This allows them to offset some of the cost of bringing their property up to scratch.

Steve adds: “We are not the only buy-to-let lender in the market to offer this, and we have certainly seen a growing number of landlord borrowers taking advantage.

“We’ve seen new boilers put in, double-glazing and a range of other energy-efficiency measures which, with a new EPC, get the property to the A-C rating, therefore allowing the owner to claim the £1,000.”

Property investors looking to boost their portfolios with energy efficient homes can do so by investing in a high-quality new build. At BuyAssociation, we have a range of investment options available in some of the UK’s top-performing markets. Get in touch today for more information.

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