The lender has changed its lending conditions for residential buy-to-let and commercial mortgages through Kent Reliance and InterBay to accommodate the incoming energy efficiency regime.
For example, it is requiring the borrower’s solicitor to prove the property has achieved the E rating, but a three-month renovation window many be permitted for commercial properties.
From 1 April it will be unlawful to grant a new tenancy on any residential or commercial property with an energy performance certificate (EPC) rating of F or G.
The One Savings Bank changes are:
Buy to let – all mortgage offers will contain a requirement for the acting solicitor to advise the borrower that any properties rented out in the private rented sector must have a minimum EPC rating of E.
Commercial properties – properties that do not meet the minimum standard E rating will be referred to its real estate team to review. Where appropriate, a condition will be included in the formal mortgage offer to ensure that the property receives a rating of E or above within three months of completion.
Incentive for landlords
One Savings Bank sales director Adrian Moloney said: “The new regulations bring added complexities into a highly regulated market, but we want to ensure the new requirements are as straightforward as possible for our broker partners.
“Ensuring that properties are energy efficient is important and a reflection of the market’s drive towards professionalisation; however, we wanted to make sure that a low rating didn’t necessarily mean landlords would be prohibited from accessing lending.
“Instead, we’ve introduced proportionate terms into our conditions to raise awareness and act as an incentive for landlords to improve their properties, which will ultimately help them attract tenants,” he added
Yesterday Connect for Intermediaries chief executive officer Liz Syms told Specialist Lending Solutions there was only a small window remaining for landlords to remortgage to get funding for an upgrade.
Otherwise, she warned that lenders would likely view their properties as unlettable and so bridging finance may be the only source of funding.
There are still around 300,000 rental homes that are rated F or G, although this number has fallen from 700,000 in 2012, estimates trade body Arla Propertymark.