Energy performance certificates (EPCs) are ratings that are assigned to a property, indicating how energy efficient it is.
All properties need an EPC rating whether they are being rented out, sold or have just been built. At present, rental properties only require an EPC rating of E or above, but this is soon to be changed.
In a bid to reduce carbon emissions, the government announced that landlords will have to get their rental properties to a rating of at least C or above. However, the government has since reverted on this plan, so it seems this may not be likely to happen. That said, it may still come into force if the plans change again, so it's good to be aware of what it may mean.
This blog will help you understand what it could mean…
How will these changes affect landlords?
For some landlords the regulatory changes may have no impact on them at all, as their rental properties are over the new minimum threshold.
The large majority however will need to work on their rental properties in order to meet the new requirements.
Some of these works may include:
- Increasing insulation throughout properties
- Replacing old boilers
- Investing in double glazing
- Upgrading doors
- Implementing a smart meter
- Invest in LED lighting
Costs associated with implementing these new measures can quickly mount out, particularly if you have multiple buy to let properties that will need upgrading.
Therefore, the biggest impact these changes will have on landlords is related to increasing costs, which they may not currently have the budget for.
Will these changes affect people who aren’t landlords?
Although these changes will mainly impact landlords, other people may still be affected. For instance, tenants who are living in properties that need to be upgraded may have to temporarily move out so that the works can be completed.
As a result of this, they may have to find temporary accommodation, which could be costly if the level of works needing to be completed are substantial.
To add to this, these changes may signal that the government will amend the EPC requirement for residential properties in the future, and therefore homeowners will also have to consider new measures.
The impact of these regulatory changes may therefore be felt across a wide range of groups, and so it’s important to be aware of what financial help may be available.
What financial help is available?
Landlords who are looking to upgrade their properties in line with the regulatory changes can use personal finance or additional borrowing from a first mortgage provider. Another popular option is a buy to let secured loan to help fund the costs.
As the name suggests, buy to let secured loans are secured against a rental property. Consequently, lenders generally allow larger amounts of money to be borrowed and often are much more relaxed with their criteria than unsecured finance providers. A secured loan can also be more flexible than adding the borrowing to a first mortgage allowing the additional borrowing to be taken over a different term to the main mortgage and repaid more quickly.
Therefore, these loans can be extremely helpful to people who are in need of a large amount of funding to cover property related costs.
Speaking with a qualified mortgage broker can help people to understand the array of options that are available, allowing them to get the most beneficial solution for their situation.
Summary
To sum up, the new EPC rule changes may substantially increase costs for landlords, and so they may need to look into getting some level of financial help to aid them. Although this may seem daunting, there are lots of options available including a buy to let secured loan. Understanding how to get one of these loans and whether it is the right solution can be achieved by speaking with a mortgage broker.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
