Emily Hollands - Group Head of Distribution, OSB Group
Commercial landlords have been working hard to get their properties in shape as the government has ‘tightened their belts’, proposing and enforcing progressively stricter standards on the journey to achieving more energy-efficient properties.
Initially from 1 April 2018, landlords with a valid Energy Performance Certificate (EPC) rated band F or G, were unable to grant a new tenancy agreement for non-domestic private rented properties.
And recently, the government’s Minimum Energy Efficiency Standards (MEES) for non-domestic private rented properties have tightened further.
On 1 April 2023, they were applied to all existing tenancy agreements. Landlords could no longer let non-domestic properties with an EPC rating of F or G. Landlords failing to comply with these standards could’ve found themselves in ‘hot water’, looking at a financial penalty ranging from £5,000 to £150,000 dependent on the property’s Rateable Value.
In future, commercial landlords can expect more of the same pressure to reach further incremental milestones. The government has proposed a regulatory target for the Non-Domestic Private Rented Sector Regulations of EPC C by 2027 to continue the trajectory to reach their goal of EPC B by 2030 .
Commercial landlords working towards meeting these standards will be aiming to make their properties, even more, energy efficient over the next few years.
But what kind of remedial works do they need to complete?
Landlords could consider works such as insulation, double glazing and the installation of energy-efficient boilers. It could be more cost effective to tackle these improvements now and the good news is, they can all be carried out quickly with the right financing.
Bridging finance could be an ideal solution as it offers more flexibility as an alternative to other options such as remortgaging. And, it can help landlords to carry out improvements quicker with less of an impact on their tenants’ lives.
Residential landlords are also facing a proposal from the government, which suggests that properties are upgraded to an EPC band C rating for new tenancies by 2025, and for all tenancies from 2028 .
Our Precise Mortgages refurbishment buy to let proposition could support them with property improvements.
It offers landlords a choice of three exit products, depending on the type of refurbishment work, as they make improvements to bring their properties up to the proposed minimum EPC rating. And, it combines the flexibility of short-term bridging finance with the surety of an exit onto a long-term buy to let mortgage once any improvements have been finished, providing the property meets the expected valuation following completion of the work.
We accept applications from personal ownership, limited company, HMO/MUB and limited company HMO/MUB landlords. To find out more about Precise Mortgages contact the team at Aria on 020 3839 9998 or email email@example.com.
Whether your landlord clients are improving their properties to help their tenants with lower energy bills and more comfortable homes for them to live in, or to support the government’s goal of reducing their properties’ environmental impact, specialist finance support could be just what they’re looking for.
Content provided by One Savings Bank