Is there a spring in landlords' EPC steps?

As we look forward to Spring, this is traditionally a period when the purchase market really kicks into gear. Having said that, the past few years have been anything but traditional when it comes to seasonal buying patterns across the housing and mortgage markets. This is due to a set of largely unforeseen circumstances which generated a host of both negative and positive ramifications.

From a landlord perspective, there have always been a huge range of considerations to take into account when looking to add to portfolios, no matter the season. In today’s BTL marketplace, there is another prominent factor to weigh up in the form of EPCs and a growing number of landlords are actively making present and future decisions based on these.

This was a fact highlighted in the latest Q4 2022 BVA BDRC Landlord Panel research report, undertaken on behalf of Foundation Home Loans, which outlined that over two-thirds of landlords (68%) say they would now be less likely to purchase a property if it has an Energy Performance Certificate (EPC) rating of below C – the level at which anticipated legislation is likely to be introduced for all new and existing private rental sector tenancies from 2025 onwards.

Of those specifically looking to buy in the next 12 months, almost two-thirds (59%) said they would be looking to buy a property rated C or above, while 29% said they would be buying those rated D through to E. Landlords were also more likely to sell a property rated D–E over the next 12 months, rather than one rated A–C.

It’s encouraging to see landlords actively considering their EPC-related portfolio plans. It’s also reassuring to see a number of lending solutions emerging which can meet the needs of landlords who are looking to upgrade their properties to hit those higher EPC bands and deliver good quality, energy efficient housing for their valued tenants. And long may this important combination continue.

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