EPC D and CO2 emissions F ?

Hi Phoebe,

I hope my editors notes and articles references above help.

It was my understanding that the new rating will be based on C02 emissions for commercial properties and on fuel costs for domestic properties.

Dear Phoebe

It strikes me (as a Registered Valuer) that there may well be some other issues and/or the valuer is taking a very hard line that it may be worth discussing with them.

The issue on low EPC bands is the ability of an owner to let the property. I have come across properties being sold, or re-mortgaged, where the bands are F and G. However, I did not value them at nil or state they were unmortgageable.

Taking a pragmatic view, I obviously raised the issue in my reports so that the lender is clearly aware. Lenders, of course, may have specific policies of not lending in certain situations, so the valuer has to make it clear. However, as for the CTUAL value, the low EPC band does not prevent owner occupation.

The value will be assessed on a property by property basis with a valuer considering the market conditions and issues arising from the EPC survey. It would be appropriate to factor in costs to follow the EPC surveyor's recommendations, perhaps with an extra deduction for risk/time it will take to resolve. The issue will undoubtedly be worse for older, poorly maintained properties.

In conclusion, there are many variables so I recommend speaking to the surveyor to get their opinion.

Graham

I think the point here is that a CO2 test is for commercial development - i found the documents in the 2018 regulations but have lost the link - sorry! - Is anyone beter on the net than me...
A good freind, yesterday, advised me he has same issue and his valuer has said he will advise the lender NOT to lend funds because of the F rating for CO2 emmisions.
Sadly he is tied, for various reasons, to just one specific High Street Bank lender.
Can anyone suggest a way forward to allow him to get a B2L mortgage ?
Cheers
Allan

The carbon emissions rating measures your property's impact on the environment based on standard assumptions about occupancy & energy use & contributes towards the overall energy efficiency rating but it is the energy efficiency rating you rely upon to determine whether an E above or below.

Hi Phoebe & Allan - may I suggest you raise this issue with the Accreditation Body with whom the assessor is registered (their name will be on the certificate) and they should be able to clarify the rules. But as noted above the EPC is but one aspect of a valuation report and there may be other issues affecting suitability for a mortgage loan. Allan

Can you let me know the lender and if a buy to let or personal residential purchase and I will check the lender's EPC lending criteria. I ask as the few I have checked state what the "energy efficient rating" (EEF) needs to be but nothing on the "carbon emissions rating" and even if the EEF is an F or G some lenders state a retention will apply until the recommended works to bring it up to an E are carried out.
Have you seen a copy of the valuation? If not, ask for a copy because there may be an underlying other issue and the decline may not be down to the headlines you have been given.

Reply to the comment left by Laura Delow at 15/07/2018 - 05:59
Thanks everyone for the great advices above, really appreciated.

Hi Laura,
Lender - NatWest and Buy to Let Mortgage.
I have not seen the valuation report and will ask 1st thing Monday.

Many thanks,
Phoebe

Reply to the comment left by phoebe at 15/07/2018 - 19:15
Hi Phoebe - there's nothing specific on their website about EPC ratings. It's vital you get a copy of the Valuation but meanwhile check the list below as to whether the property falls in to one of NatWest's unacceptable BTL lending categories as may be it's the carbon emission rating coupled with XYZ that makes it not suitable for mortgage purposes:-
• Properties with a floor area of less than 30m2.
• We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or 'Related Person' tenancies.
• We cannot accept applications for regulated buy-to-let mortgages (where the occupants are immediate family members of the mortgage holder).
• Properties listed under the Housing Defects Act (valuers will advise us if the property falls within the Act).
• Steel clad houses.
• System built concrete construction.
• Prefabricated/(pre)reinforced/poured or shuttered concrete construction.
• Easi-form construction (except by Laing from 1945 onwards).
• Mundic block property.
• Properties built on contaminated land.
• Timber-framed property with cavity wall insulation unless installed during construction.
• Multi-ownership properties.
• Shared ownership properties.
• Working farms, smallholdings and crofts.
Leasehold:-
We require a minimum of 30 years to be remaining on the lease at the end of the mortgage term. However, some flexibility is allowed for properties in prime locations in central London, where the minimum lease left at the end of the mortgage should be 10 years. If the lease left is under 85 years, then please discuss this with your BDM for further guidance.
Live / Work properties:-
To qualify for a buy-to-let, the work area of the property must be no greater than 20% of the total property area. Live/Work properties are not to be used as commercial outlets, as only one room in the property is dedicated for business use. In all instances, assessment will be made based on the valuer's comments.

Property types that are acceptable BUT subject to the valuer confirming saleability and suitability for mortgage purposes, we can lend against the following:
• No-fines concrete construction.
• Steel framed houses (exceptions apply, please check).
• Flats over or immediately alongside business premises.
• 100% timber construction.
• Properties containing high alumina cement.
• Freehold flats - where it is possible to enforce positive covenants, the maximum LTV is restricted to 90%. Before considering lending against this type of property, we rely on the valuer’s recommendations and the solicitor’s confirmation that the property title is good and marketable.
• Agricultural restrictions - the maximum LTV will usually be 50% but each case will be assessed on its own merits.
• Properties used for business - we can only lend if the property is primarily for residential use and the work area of the property is 20% of the total property area or less.
• Leasehold properties - there must be at least 30 years left on the lease at the end of the term (we may consider less for properties in central London).
• Flats (on any level) in multi-storey type properties are usually acceptable, subject to exceptions e.g. where the valuer identifies issues with the building and/or locality which are likely to adversely affect resale.
• Where the purchase of the property was completed within the last 6 months e.g. where a property has been purchased either with a mortgage or short-term loan and a mortgage application has been submitted immediately or shortly afterwards. This does not affect applications from customers who have had a bridging loan simply because of delays in selling the existing property, subject to normal underwriting.

Once you get a copy of the valuation report, if it doesn't make sense, or you deem it unfair, you can challenge the valuer's opinion e.g. their site states:- We can only accept a valuation challenge if evidence of sales of comparable properties is provided. Please supply in section 3 below full details of the best comparables which you consider justify your challenge. These must be recently agreed or completed sales, be as similar as possible to the subject property and in the same locality. We cannot accept marketing letters, asking prices, automated valuations, indexed valuations and previous valuations. Please note that if these criteria are not met we will be unable to deal with your challenge. The completed form should be sent to Legal & General Survey Servicea via your lender. The form will then be forwarded to the valuer for consideration. Please note that LGSS cannot overrule the opinion of the valuer.
Comparable info needed:-
Comparable Property Address
Postcode
Property Style/Type
Beds
Description/Comment
Source of information, e.g. Land Registry or agents details including contact number
Date Sold
Sale Price £
Good luck. Let us know the outcome as this helps us all expand our knowledge
Laura

Reply to the comment left by Laura Delow at 16/07/2018 - 07:43
Hi Laura,
Many thanks for the brilliant information above - it helps greatly.
I have spoken my mortgage adviser - he said there is nothing else that is causing a problem on the valuation.
Anyway, I will ask again for the copy of valuation report (just in case).
I will keep you updated and many thanks again.
Phoebe