10:10 AM, 12th November 2024, About 2 weeks ago 13
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Two-thirds of landlords currently own at least one property that does not have an EPC C rating, according to Foundation Home Loans.
Data from the mortgage lender shows that nearly half (42%) of landlords plan to raise rents to cover the cost of energy-efficiency improvements.
This comes after Ed Miliband announced that all private rental properties must meet EPC C standards by 2030.
Foundation Home Loans reveals many landlords (37%) are confused about the cost of upgrading a property to meet energy-efficiency standards.
According to the mortgage lender, landlords could face an average cost of £12,000 per property to achieve an EPC ‘C’ rating.
To reach these targets, some landlords plan upgrades such as solid wall or floor insulation (37%), loft insulation (26%), boiler or heating system replacements (25%), and solar PV panel installations (22%).
According to the research, awareness of EPC standards is high, with 92% of landlords having at least some knowledge of the requirements.
However, only two-thirds (67%) report a thorough understanding of the details. Portfolio landlords with four or more buy-to-let mortgages demonstrate slightly lower comprehension of the potential regulations, with 62% stating they fully understand the requirements compared to 69% of unencumbered and consumer borrowers.
When it comes to meeting these EPC standards, 42% of landlords intend to make the necessary improvements to bring their impacted properties up to EPC C standards.
Within this group, 24% intend to complete the necessary work at minimum cost to remain compliant and keep renting the property, while 14% are aiming for upgrades that will maximize the property’s long-term value and continue letting it out.
For those who plan to carry out the necessary work, most expect to fund the improvements through savings (71%), rent increases (42%), or government grants/funding (28%), with a further 12% saying they would release equity from their portfolio and 5% seeking a further advance from a mortgage lender or a loan (5%).
However, just over a third of landlords (34%) plan to sell without undertaking any energy-efficiency improvements.
Grant Hendry, director of sales at Foundation Home Loans, said: “With potential new legislation aiming to raise energy efficiency standards and tackle fuel poverty for millions, landlords face important decisions around future-proofing their investments from an EPC perspective.
“Thankfully, this research helps demonstrate growing awareness among landlords around this topic and highlights both the financial and planning considerations involved in meeting these requirements.
“It also underlines the tremendous potential for lenders and intermediaries to support sustainable practices in the buy-to-let sector, particularly through tailored green mortgage products that align with both regulatory demands and landlords’ unique needs”
Mr Hendry adds: “As landlords adopt varied approaches to meet these standards, ranging from minimal-cost upgrades to comprehensive property improvements, it’s clear that personalised guidance is essential. Green mortgage solutions can offer landlords a strategic way to finance these upgrades, enhancing property value and reducing long-term costs.
“For lenders and intermediaries, these conversations not only strengthen client relationships but also broaden the scope of services in a sector increasingly focused on sustainability.”
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Paul
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Sign Up10:16 AM, 12th November 2024, About 2 weeks ago
The more you visit property118 the more you view it as a channel of fear and encouraging landlords to sell. I'd suggest propertytribes / propertyhub for a more balanced view of news. It's like the dailymail of proporty ownership !
David Nichols
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Sign Up10:59 AM, 12th November 2024, About 2 weeks ago
The effective date is after the next General election. It will bound to be reversed, especially when the costs of going green is realised in peoples pockets and we see America booming with oil.
Are the government really gonna let good tenants become homeless at the crunch deadline date.
I can see no significant difference of property values for both sales or rental between an epc of C or D.
I believe most of us think that Milliband is mad, and in it for self interest, so I will not become one of his sheep and if they force me to evict and sell then so be it. Fitting solar panels or insulating floors is not a worth while investment or saving for a home owner so why force it on a landlord who won't even get the benefit.
Reluctant Landlord
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Sign Up12:19 PM, 12th November 2024, About 2 weeks ago
However, only two-thirds (67%) report a thorough understanding of the details.
Because the current EPC's are crap. The focus has to either be on reducing carbon footprint OR cost to occupier. Cannot be both - hence the failing of the current system.
Until then everyone is in the dark and as a LL, I will do nothing until I have to. 2030 is a long way off and I predict a change of government before then (earlier I hope if we have a revolution!)
Smiley
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Sign Up13:58 PM, 12th November 2024, About 2 weeks ago
Spot on Paul, doom, gloom is spouted on here, and then of course with a solution, you are finished but we will sell your house, We will loan yer some money, based yet again that blinking EPC propaganda. Like newspapers, I cancelled mine in 1985, I tend to read the headlines on here and move on fast lol unfed worry dies of starvation imho but these well meaning folks with no hidden agendas, im sure🤣 keep fueling FEAR. The pluses of this great group is our numbers, and eck the deal I got on buy to let homeinsurane saved me over a 1000. The incorporation brilliant, im sure the fake news the tax man is responding too, will get sorted. The victory over Coventry Building society etc, is really the foundation stone of this group, and hopefully more responsible posts are put up, my thoughts on the EPC, is wait and see, there have been too many knee jerk reactions in the past 5 years or so. Also my thought is what happens if all landlords refuse to do it, is the government really going to evict everyone? lol this is just a devil advocate thought> dont panic folks, the fake news headliners love it, right back to me James Webb telescope, latest heading JW spots aliens on planet, 300 light years away, 😂🌻 xxx
Smiley
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Sign Up14:00 PM, 12th November 2024, About 2 weeks ago
Reply to the comment left by David Nichols at 12/11/2024 - 10:59
spot on
JeggNegg
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Sign Up15:00 PM, 12th November 2024, About 2 weeks ago
Reply to the comment left by Reluctant Landlord at 12/11/2024 - 12:19
I am concerned why it takes the operators of the Epc database, a designated central registry service provider, who I assume get instructions from the ministry of housing, communities and local government, so long to update the database with meaningful data.
Please can we see what variables and their associated points so we can make business decisions to meet the 2030 target.
As I don’t have a bottomless cash pit I need to make sure all my improvements are offset able against income rather than a capital improvement.
Cider Drinker
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Sign Up18:26 PM, 12th November 2024, About 2 weeks ago
My last remaining EPC Rated D property is worth around £100k.
The EPC suggests that I spend up to £15,665 to meet a C Rating. Doing so would save the tenant a massive £256 per year. It’ll pay for itself in just over 60 years - if I ignore the cost of capital (and if I don’t increase the rent by £1,500 per year to help fund the works.
(Figures based on EPC dated 2016).
I think I’ll need Diane Abbott, or any one of the loonies in government, to help me with my business plan.
Smiley
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Sign Up20:33 PM, 12th November 2024, About 2 weeks ago
Reply to the comment left by Cider Drinker at 12/11/2024 - 18:26
lol
Paul Essex
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Sign Up13:49 PM, 13th November 2024, About A week ago
How dare they suggest we will increase rent to cover our costs - we will of course go and shake the magic money tree to get the required funds.
Perhaps the NRLA could come up with a dramatic advertisement asking for funds to help stop tenants freezing to death this Christmas 🎄.
Richard
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Sign Up19:37 PM, 13th November 2024, About A week ago
Ok, so 43% are going to do the upgrades, 34% are going to sell. What are the rest going to do? If a third of landlords sell up then there will be a housing crash and a lot of homeless people. Listening to the changes coming in with the renters reform bill it is really not worth renting out any more. Once the government have every property on their database think we can easily work out what will be coming next!