Most current indications point to a gradual but accelerating return to town and city life. The latest data from Rightmove confirms a major spike in demand for rental properties in and around London as workers once again find themselves beckoned back to the office.
All of this is playing directly into the pockets of buy-to-let landlords, who across the UK are reaping the benefits of record-high monthly rents. Unfortunately, many (if not most) of these BTL investors are also finding their futures blighted by the prospect of new minimum EPC rating requirements on the horizon.
Recent estimates suggest that at least 60% of all current housing stock in the UK has an EPC rating of D or lower. This would suggest that the vast majority of properties will need to be upgraded significantly in order to meet the new minimum C rating within the next few years.
The extent of the repairs required will vary significantly from one property to the next. Even so, it is estimated that the average landlord will face costs of between £6,000 and £10,000, some significantly more.
Understandably, the tendency among many cash-strapped landlords is, for the time being at least, to bury their heads in the sand. But while forking out significant sums of money for energy-efficient upgrades is far from fun, it’s something that really needs to be done sooner rather than later.
Tenants prefer energy-efficient properties
With household energy prices at record highs, tenants are increasingly setting their sights on energy-efficient properties. Further hikes are on the cards for the coming months, which will make it increasingly difficult to let out inefficient homes for decent prices.
The more energy-efficient a rental property, the easier it is to let it go and get the best possible return on your investment.
You have no choice but to make the necessary improvements.
The costs of making the renovations required to meet the government’s new standards are only likely to increase over time. Those who wait until the last minute will only face the prospect of elevated costs and a mad dash to get over the finish line in time.
Acting early could therefore save landlords time, money, and stress—all in significant quantities.
You could face heavy penalties if you don’t
For those who fail to meet the deadline, significant penalties will almost certainly apply.
“The proposed Minimum Energy Standards for rented properties will shift from an E rating to a C rating under the new rules, and making changes isn’t optional. The new regulations will be introduced for new tenancies first in 2025, followed by all tenancies in 2028,” commented Sundeep Patel, Director of Sales at Together.
“If your property is found to fall short of the required rating, you could face a fine of up to £30,000. Plus, you’ll have an ungettable property on your hands, which is not only a waste of an essential residential resource but also means you’ll incur a loss of rental income.”
If you would like to learn more about the potential benefits of bridging finance for energy-efficient home improvements, contact a member of the team at UK Property Finance today.