New EPC Requirements set to force out landlords during cost-of-living crisis
Liddle Perrett comments on the new EPC Requirements, which are set to force out landlords during cost-of-living crisis.
The introduction of new rules requiring improved Energy Performance Certificates (EPC) may force some landlords in the short term to sell their buy-to-let properties due to a perfect storm of rising compliance costs and the cost-of-living crisis.
In an uncertain economic climate, they may well choose to cash in their chips now while they know what they have, rather than take the risk of riding out the current economic storm.
But the news isn’t all bad as the availability of suitable rental property could present opportunities for property investors.
David Liddle, Director at Mortgage Brokerage Liddle Perrett Ltd., said:
“As mortgage rates rise and may clients are looking to remortgage as fixed rates come to an end, we expect to see some clients sell as soon as their current EPCs and mortgage rates expire.”
The introduction of new EPC requirements, which must be raised to a “C” by 2025 from the current “E” rating puts pressure on existing landlords.
So for those accidental landlords, people with property investments reaching retirement age, and small landlords, the news is not ideal. Especially for older properties that may not be well insulated. For existing tenancies, the deadline is 2028.
But, for the buy-to-let market, there is some good news.
The expected increase of available rental property onto the housing market means that there are opportunities for investors looking for additional properties where they can make the necessary improvements, and add property to their portfolios.
David Liddle said:
“The news for the buy-to-let market isn’t all bad.
“For landlords looking to invest, suitable properties coming onto the market for a quick sale represent new investment opportunities.”
Potential landlords who invest in new build property are able to take advantage of more energy efficient homes as a plug-and-play option with a view to future-proofing their investments.
However, they are paying over the odds for new property, so the availability of older homes presents a new opportunity. And with completions currently quite fast at around 150 days, and sellers looking to secure their equity, there are some very motivated sellers in the housing market which will stimulate sales.
David Liddle said:
“The introduction of new EPC rules is a cost that some landlords will not be willing, or able to absorb.
“Whilst this is bad news for many landlords, it represents an opportunity for many other professional investors.
“Not only that, but the end result of the change to EPC rules means that over the long term, the quality of the housing stock will increase, and the cost to tenants of running their homes will fall due to improved insulation, replacement of white goods, boilers and other household equipment with more energy efficient products.”
It will be interesting the introduction of new EPC rules will have on the rent that people pay.
Kindly shared by Liddle Perrett
Main article photo courtesy of Pixabay
