Precise Mortgages (Liza Campion

SUPPLIER FEATURE

Landlord looking to boost a property’s EPC rating? How refurbishment buy to let could help

Tick-tock. Tick-tock. Can you hear that? No, I’m not talking about the latest video on the hugely popular social media platform. Instead I’m referring to the clock counting down on landlords to make sure their rental properties are as energy efficient as possible.

As I’m sure you’re already aware, the government has said that its preferred policy scenario is that all new tenancies must have an Energy Performance Certificate (EPC) rating of at least C by 2025, and by 2028 for existing tenancies.

Liza Campion

Head of Corporate Accounts, Precise Mortgages

Perhaps not surprisingly, the proposals are having an effect on the behaviour of landlords. According to the latest research from BVA BDRC, just over two in three of them say they are less likely to purchase properties with an EPC rating of D or lower in the future1. In fact, more than 70% have sold a property with an EPC rating of D-G in the last three months2 , with half of those thinking of selling in the next 12 months saying they’d choose to get rid of a property with a D-G rating3 .

So what does this mean for the buy to let market? Well, whilst I think we’ll inevitably see some landlords exiting the market, I do believe it provides opportunities for those who’re prepared to put in the hard yards to bring properties up to the minimum EPC C rating before letting them out.

And if you’re approached by a customer looking for finance to enable them to carry out improvement work, did you know that refurbishment buy to let could be the solution?

Refurbishment buy to let brings together the flexibility of bridging finance with the surety of an exit onto a long-term buy to let mortgage once any improvement work has been completed, providing the property meets the expected valuation following refurbishment.

Precise Mortgages’ new and improved refurbishment buy to let offering offers a choice of three exit products and could be ideal for landlord customers who’re looking to maximise their rental yields and optimise the capital value on their properties, while improving their properties in line with EU Taxonomy and the GFI’s Green Home Finance Principles.

It includes options for landlords who are carrying our refurbishments which include some element of energy efficiency, for example fitting double glazing, upgrading a boiler or adding loft insulation; as well as those who’re refurbishing a property that already has an EPC rating of C or above, or is awarded a C rating as a result of the improvement work.

Customers can choose between serviced or retained interest payments during the refurbishment stage, and have the peace of mind of knowing that the rate on offer is the rate they’ll get after the post-works valuation.

And as well as benefitting your landlord customers, we’ve also made the process of applying for it as easy as possible. Brokers only need to submit one application, which we’ll key in for them, and will receive support from one expert underwriter throughout the whole case. One valuer will assess the property (where possible) and one conveyancer can act on the application. Finally, two offers will be issued – one for the bridging element and one for the buy to let mortgage.

Raising the minimum EPC rating will improve the conditions for tenants living in rental accommodation, as well as having a positive impact on the environment, so it’s important your landlord customers know that there are products out there that can help them achieve their aims.

To find out more about Precise Mortgages refurbishment buy to let offering, speak with your local business development manager or get in touch with a member of our dedicated bridging underwriting team by calling 0800 116 4385.

Sources: 1 BVA BDRC Landlords Panel Report Q2 2022 (slide 56)

2 BVA BDRC Landlords Panel Report Q2 2022 (slide 59)

3 BVA BDRC Landlords Panel Report Q2 2022 (slide 58)