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Category: government and politics
Labour have re-stated their intention to tighten minimum Energy Performance Certificate (EPC) ratings for properties in Private Rented Sector (PRS). As a result, landlords are back to square one on how to achieve them.
When Commercial Trust reported on Rishi Sunak’s U-turn on the matter back in September 2023, there was always the possibility that, if Labour won the election, the issue would re-emerge. And so it has come to pass, with a deadline of 2030 given.
Now landlords are again left to wonder how to fund improvements of their properties. With the persisting concern as to the costs involved, perhaps the only good news is that buy to let mortgage lenders have remained committed to offering “green” products, with discounted mortgages rates.
We’ve compiled some of the most cost effective ways to improve your property’s energy performance.
However, before landlords push ahead with any plans, it is important to acknowledge that the position how properties will be assessed in the future is not entirely clear.
What’s more, with their significant change in tone around the removal of Section 21, some healthy scepticism about the 2030 deadline may be in order.
Why you should work to improve your property’s EPC rating
Many landlords want assurance that their property is as energy efficient as possible. After all, a better Energy Performance Certificate (EPC) can be beneficial in many ways, including getting favourable mortgage rates.
The purpose of EPC assessments is to find areas where a property may be failing to retain energy as well as it could be. Identifying energy wastage wherever possible allows a landlord to take preventative steps, with the potential of achieving lower running costs and reduced environmental impact in the long run.
As well as better mortgage deals, a higher EPC grade may lead to a slightly increased valuation of your property. From a potential tenant’s perspective, the promise of lower energy bills can be very appealing.
Best ways to improve energy efficiency
Installing sustainable loft insulation is one of the most effective ways to keep heat inside a building during winter, or out during the summer. Eco-friendly insulation materials often have breathable membranes to maintain air flow and prevent homes from becoming unbearably hot during summer, thereby increasing the comfort for tenants living in the property.
Cavity wall insulation is another effective way to maintain the temperature in a home. It’s best to thoroughly research the most effective materials and methods you can take to improve energy efficiency.
Similarly, any single-glazed windows need to be upgraded to double-glazing. Many people take double-glazing for granted since it has become so standardised, but older properties may not have it on every window. With so much of a home’s heat being lost through windows, it’s important that they all have an extra layer of insulation.
Check the building’s heating infrastructure. Installing a thermostat with modern heating controls can save money in the long run. If you have a low-rated boiler that’s coming towards the end of its lifespan, you may also consider replacing it with a newer model, such as a condensing boiler.
Another quick win is to replace halogen lightbulbs with LEDs. This is the cheapest upgrade you can make, but it can save tenants a noticeable amount on electricity costs.
Some properties are naturally harder to insulate, especially older structures, as they were not built to the same specifications as modern houses. For example, Victorian terraces are popular as rental properties, but may be more challenging when trying to improve energy performance. So do check if your property is exempt (EPC exemption information which at the time of writing remains the current method of assessment can be found here).
Get inaccurate EPCs re-evaluated
EPCs aren’t always correct; if there have been changes in your property that impact its rating since the last certificate was issued, you may be able to achieve a higher rating with just the cost of a reassessment – and then you can also pursue green mortgage discounts at your next renewal.
It is well worth looking at your EPC certificate to see if there are inaccuracies in the feedback that have negatively affected the final score.
How to pay for renovations
There are a few ways you can borrow to fund renovations, without having to take money out of your savings. If you have significant work to do you could raise capital from equity in your property by remortgaging, or take out a bridging loan.
Or, if you only need to raise a smaller amount, you might use second charge borrowing or ask your existing lender for a further advance on your current mortgage.
Speak to one of our advisors to discuss raising funds for property renovations. They will be able to explain the options to help you identify which will be the most cost effective and can find a great deal for you.