The Mortgage Solutions Green Mortgage Masterclass, in partnership with OSB Group and Cotality, covered how brokers should help landlord clients prepare to upgrade properties and go beyond Energy Performance Certificates (EPCs) to get a true picture of the costs needed.
Michael Davey, group head of sustainability at OSB, said the government saw the private rental sector as a key part of its agenda to lower bills and create warm, healthy homes and this would require a “far more challenging compliance regime”.
He said it will not be a “comply-and-forget action”, and it was likely to be impactful across the entire rented sector value chain.
“Whilst landlords won’t be forced to sell overnight, they will need to consider things like maintaining the value of their properties or avoiding them diminishing where they have lower energy-efficient properties or properties that are harder to retrofit,” Davey added.
He said there could be an opportunity to attract and retain tenants who want cheaper bills and more comfortable homes, adding that the “most important consideration” would be ensuring portfolios remain financeable.
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Davey added: “We think that retrofit matters right now, rather than as we progress to 2030, because the compliance requirements might require investment in the next business cycle or before the next financing event and that demand for lower-cost, energy-efficient homes is only going to increase.”
He said brokers who were on the front foot to help landlords could use this as an opportunity, as research from OSB found landlords wanted access to better data on costs and actions they need to take to improve the efficiency of their portfolios.
Watch the full discussion here:
Landlords need a strategic plan
Chay Collins, group head of mortgage proposition at OSB Group, said retrofit was not just a one-off compliance cost anymore, but a strategic property portfolio management issue.
He said these commanded assessments of budgeting, cash flow and planning for voids where more extensive works were needed.
Collins said a blanket “upgrade everything” approach was probably the wrong answer, and it may be better to segment works, focusing on the “quick wins”, upgrades around finance points and deciding whether to upgrade or sell.
He added: “We’re entering an era now where landlords need high-quality analysis and advice around what to do with their portfolio strategy, to understand retrofit costs, yield impacts, cash flow implications and funding options.”
Collins said brokers who could turn this from a looming compliance risk to a structured plan would help build relationships.
