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Getting to grips with energy efficiency and EPC standards in Q3 2022
Heightened awareness around Energy Performance Certificates (EPCs) has been evident across the BTL sector since the initial announcement of the government’s Improving Energy Performance Certificates action plan.
Whilst this bill remains in its consultation phase and nothing - at the time of writing - is set in stone, a growing number of landlords are carefully assessing their options in terms of its potential impact.
It can only be a good thing that more landlords are getting to grips with how energy efficient their current properties are and evaluating the pros and cons attached to upgrading them. As such, it was encouraging to see that almost 9 in 10 landlords (86%) were fully engaged with minimum EPC standards in the latest BVA BDRC Landlord Panel research for Q3 2022, although full awareness and appreciation of these regulations dropped slightly for landlords with a single property.
High number of single-property landlords still not fully understanding the new standards
Focusing on these single property landlords, 16% said that they were aware of the minimum standards but didn’t fully understand the details and 8% said that they were not aware of them at all. Conversely, awareness and full understanding of these standards was the highest amongst landlords with 6-10 properties (93%) and landlords with 20+ properties (91%)
Low efficiency properties mostly within portfolios – capital raising opportunity?
When it came to the type of property owned by landlords from an EPC perspective, the incidence of landlords with a property rated at E or below was suggested to be 17%. The incidence of properties rated E, F or G within landlord portfolios increased in-line with portfolio size.
Fewer than 1 in 10 single property landlords have a property that is rated E, F or G, rising to over 1 in 3 landlords with 20+ properties in their portfolio. In addition, 3% of landlords who took part in the survey didn’t know the EPC rating on any of their properties.
7 in 10 have already acted
Staying on this topic, over 7 in 10 landlords (71%) who have a property that doesn’t meet the energy efficiency requirements have carried out works in response to these new energy efficiency proposals. Breaking down the reasoning behind this, 38% of landlords have carried out works to maximise the long term value of the property, with 37% carrying out works at the minimum cost required. Almost a third of landlords (31%) who have a property that doesn’t meet the requirements have yet to carry out any works thus far.
As one of the first specialist lenders to launch a green mortgage offering, here at Foundation Home Loans, we are committed to supporting the green agenda and in providing options to those landlords who are looking to add to their portfolios or remortgage existing properties within them.
So, if you would like to know more about our green mortgage proposition then why not speak to one of our specialist team today.
*This article was originally published on The Intermediary
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