Revealed: The areas where landlords may soon be unable to let their properties

A study by conveyancers Muve has revealed the areas where landlords may soon be unable to let their properties.

A recent study by nationwide conveyancers, Muve, using official data from the Office for National Statistics, has revealed the most and least environmentally-friendly areas. 

Key findings from study:

• • Gwynedd is the least environmentally-friendly area, with an average EPC rating of 6 (equivalent to a low D rating)
  • Tower Hamlets is the most environmentally-friendly area, with an average EPC rating of 8 (equivalent to a C rating). 
  • Landlords could make an extra £141.60 on average per two-bed property per month if they increased the property’s EPC rating to a C.

Landlords could use the results of this data to see which areas have the most unlettable properties, presenting development and renovation opportunities.

DISCLAIMER: This information is intended for general interest to provoke thought; it is not investment advice.

The least environmentally-friendly areas

According to the data, Gwynedd is the least environmentally-friendly area, with an average EPC rating of 56.6. Gwynedd is known for being home to the Snowdonia National Park and numerous historic castles and churches. In the past, properties were built using less energy-efficient materials such as stone and slate; nowadays, materials such as concrete blocks or bricks are used for the walls, while timber or metal frames are used for the roof.  Although, many modern houses still feature traditional Welsh elements such as slate roofs or stone facades to blend in with the local environment and reflect the culture.

According to the government’s Official House Price Index, of the properties sold in 2020, the average year the properties were built was 1960. 

Following closely behind was Ceredigion, another Welsh county, with an average EPC rating of 57.5. Ceredigion is known for its stunning scenery, rugged coastline, hills and beaches. Much like Gwynedd, properties were built from stone and slate, with the addition of thatch. Modern houses in Ceredigion also reflect the Welsh heritage and culture.

The government’s Official House Price Index revealed that of the houses sold in 2020, the average year the properties were built was 1968.

You can see the full table of the top 5 least environmentally-friendly areas below:

The effects of improving a property’s EPC rating

Improving a property’s EPC rating can benefit both landlords and tenants. 

David Jabari, CEO of Muve, said:

“Studies have found that improving the energy efficiency of a property can boost its value by as much as 20% when going from an F/G rating to a C rating.

“Improving your EPC rating is a great way to reduce energy bills.

“If your tenants pay the bills, a property with a higher EPC rating will be more attractive than one with a low EPC rating.

“A higher EPC rating means you and your tenants are less likely to deal with maintenance issues such as dampness, mould, condensation and frozen pipes.

“Another benefit of moving into an energy-efficient property or improving a property’s EPC rating is that more high-street mortgage lenders are handing out green mortgages, giving you a better interest rate or cashback on your mortgage, on top of saving from your energy bills.”

Based on results from PropertyData for the average cost of rent per area each month, if a landlord improved an F/G-rated 2-bed property in Gwynedd to a C rating, they could charge an extra £130 each month based on the 20% increase in value. For a 3-bed property in West Devon, landlords could charge an extra £177 monthly if they improved the energy certificate from an F/G to a C. 

You can see the full table of the average monthly rent costs with an additional 20% increase below:

The new rules also mean that people thinking of buying-to-let will need to be prepared to improve the EPC rating if it is below a C rating, or they won’t be able to rent it out.

Muve works with the mortgage broker, Habito, who found that improving a one-bed flat from a D to a C rating costs £3,653, a small mid-terrace house is likely to cost up to £6,400, while larger detached houses can cost up to £12,540. 

The top 5 most environmentally-friendly areas

The most environmentally-friendly area is Tower Hamlets, with an average EPC rating of 74.8. This East London borough has many newly built high-rise apartments and offices in Canary Wharf, for example, as well as many older Victorian and Edwardian-era buildings in the Whitechapel and Bethnal Green areas. In recent years, there has been an increased focus on sustainable building practices in the area, with many new buildings incorporating environmentally-friendly materials such as recycled steel and timber, low-energy insulation and solar panels.

The second most environmentally-friendly area is the City of London. However, this area has fewer residential properties compared to other parts of London due to it being primarily a business district. Many residential properties in the City are high-end apartments or penthouses in modern developments. 

David Jabbari shares his top tips for making a property more energy efficient:

• • Insulate your walls, loft and floor to reduce any heat loss and transfer, keeping your home warm in the winter and cool in the summer.
  • Upgrading your windows to double glazing, Low-E glass, or thermally broken window frames will stop heat from escaping and any draughts.
  • Install energy-efficient heating systems. Consider swapping your boiler for a condensed boiler, heat pump, or biomass boiler and ensure proper insulation for pipes and hot water tanks.
  • Switch to LED or CFL lights, which consume less energy and last longer. Make sure you turn off the lights when you leave a room or install a motion detector or timer to automatically turn the lights off.
  • Install solar panels to generate clean and sustainable energy for your property, lowering your carbon footprint.
  • And finally, fix any leaks to improve water waste.

Kindly shared by Muve

Main article photo courtesy of Pixabay