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Supporting a greener future with energy efficient rental properties – Landbay

by: Paul Brett, managing director, intermediaries, Landbay
  • 03/08/2021
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Supporting a greener future with energy efficient rental properties – Landbay
By now, we all know the environmental window is in its eleventh hour and if we don’t act now to keep it open, it may be too late.


The UK government has made it clear that by 2030, all landlords must take action to improve the Energy Performance Certificate (EPC) ratings of their properties. Included in this, landlords are no longer permitted to let properties with EPC ratings below E, unless they have a valid exemption in place.

The Minimum Energy Efficiency Standards, introduced in 2018, state that if EPC ratings are G or F, landlords are expected to improve the rating to E before letting a property.

They must spend up to £3,500 to make improvements and if the rating is still not up to E they have to register for an exemption on the PRS Exemptions Register.


Looking ahead

However, it would be wiser for landlords to look further ahead and spend more money on getting the EPC rating to C or above. This is because new EPC regulations mean that from 2025, in order to let a property the rating must be C or higher.

These changes will be phased in starting with new tenancies but from 2028 all rented homes must comply.

The proposed changes have been designed to ensure UK homes are more energy efficient in the future and to reduce carbon waste.

Brokers can also play their part by bringing green mortgages to the attention of landlords and alerting them to these new EPC regulations if they are not already aware. Failure to comply with these changes could result in landlords facing penalties of up to £30,000.


“Carrots over sticks”

Our approach is carrots over sticks, which is why we have reduced rates for landlords with properties that have EPC ratings of C or above.

At Landbay, we recognise that we all have a part to play, and our new green mortgage range is our first step on our environmentally conscious journey. Responding to broker and market demand, we felt it was time to launch a mortgage range that would support landlords who have been, and who continue to let properties with a lower impact on the planet.

By lowering rates in accordance with property EPC ratings, it is our sincere hope to support a greener future by incentivising energy efficient rental properties as an attractive option for landlords.

This month, the government launched new data on EPC ratings and the estimated cost involved in improving the energy efficiency on a property. The results were surprising for many, with the average cost of bringing a privately rented dwelling up to EPC C being £7,646. This follows ambitious government goals of upgrading all UK homes, including owner occupied, to scoring an EPC rating of C or above by 2035.

At Landbay, we will continue to offer support to landlords who are concerned about the environment and wish to take that first step to a more sustainable way of living. There are a few green mortgages on the market now and we hope more lenders will join us.

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