New proposals from the Government to make rented homes more energy efficient could cause headaches for landlords. Regulations affecting buy-to-lets have been getting tougher over recent years but the latest set of proposals may prove too much for many.
Landlords already need an Energy Performance Certificate (EPC) that shows a minimum level of E for the let to be classed as legal but in its drive to become a net carbon zero nation, those in power want to push energy efficiency levels even higher.
New proposals: C class is coming
The new proposals, which could be introduced for all new and renewing tenancies from 2025 (and all existing tenancies from 2028), would see the minimum standard being raised from E to C. The end goal is to help make rented properties ‘greener’ and reduce energy bills for tenants but the changes will, undoubtedly, affect landlords in a big way.
Buy-to-let owners should know that 2028 may not spell the end for EPC tinkering either, with rumours that new, renewing and extending tenancies that fall below a B will be outlawed from 2030 onwards.
Upgrade or up sticks?
The reality of these ambitious eco plans is that landlords may have to carry out costly works to their properties to meet revised EPC standards. This is likely to include improving insulation (walls as well as lofts), replacing glazing, draught proofing, installing solar panels and even swapping conventional boilers for heat pumps.
The amount of work needed will vary from property to property but it could easily mount up, costing landlords thousands of pounds. Add in the upcoming ban on the sale of traditional gas- and oil-fired boilers, which comes into effect from 2035, and the future maybe isn’t so bright.
The practicalities of eco improvement works
Landlords considering eco improvements to meet rising EPC standards are faced with three choices: schedule the work around incumbent tenants, which may prompt them to ask for compensation or alternative accommodation; serve notice to regain an empty property or wait for a void period and sacrifice rental income.
Buy-to-let owners should also factor in that they may never realise a return on their ‘green’ investment unless they increase the rent or selling up – two factors that are wholly dependent on the state of the property market and wider economic stability.
Selling up because of sustainability?
The Government’s EPC proposals are already causing concern for landlords. A recent survey of 600 landlords conducted by The Mortgage Works, found more than half with properties requiring improvements to upgrade their energy efficiency ratings were considering selling up. Many respondents felt they would not be able to complete or finance the improvements needed in the timescale set out by the Government.
Exit to avoid the worry
If you can’t afford to bring your properties up to scratch, sell your property now. Disposing of assets for cash negates the need to spend money on eco improvements and represents a quick way to offload a buy-to-let with a poor - or even illegal - EPC. We are helping landlords cash in on favourable property values right now – why not join them and receive money in the bank?
Landlord Buyer will purchase any rented property whatever its current EPC rating, and whether it is vacant or occupied. We can give you an instant cash offer, with completion in as little as seven working days, if required. Get in touch with our friendly team to find out how we can take the stress out of the selling process.