Minimum energy efficiency standards (MEES), which go live on April 1, require owners of privately rented properties to achieve at least an E on the energy performance certificate (EPC) ahead of agreeing any new tenancy agreement.
This means properties with an EPC rating F or G cannot be let to new tenants or have existing tenancies extended until the rating is improved.
Non-compliance carries penalties which range from £4,000 to £150,000, depending on the tenancy term.
Reflected in valuation
A statement from TMW, which is the buy-to-let arm of Nationwide Building Society, said it was making only minor changes to the valuation policy for properties not meeting the E grade EPC.
“TMW has confirmed it will continue to lend on properties with an EPC rating of F or G, with the valuer assessing the EPC data and detailing any work to be done to bring the property to a minimum E rating in the valuation report,” it said.
“The costs of any works will be reflected in the valuation figure.
“The mortgage offer will be conditional on confirmation that any necessary work must be undertaken within three months, unless the landlord provides an updated EPC or evidence of a valid exemption prior to completion,” it added.
For portfolio applications, the EPC rating requirements will only apply to the new property being mortgaged.
Nationwide’s director of specialist lending Paul Wootton said: “With new EPC regulations coming into force from April, we’re making minor changes to our valuation policy, which are designed to support landlords and uphold our high property standards.”
Bridging safety net
Connect for Intermediaries chief executive officer Liz Syms warned that landlords who failed to act before the deadline could be faced with only the option of bridging finance to make their improvements.
Last week One Savings Bank confirmed it will only lend on residential buy-to-let and commercial properties that achieve an E rating or better.