BTL lenders asking for EPC C or above?

BTL lenders asking for EPC C or above?

9:56 AM, 2nd August 2022, About 2 weeks ago 31

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Just a heads up for everyone – I’ve recently remortgaged to fixed rate products due to the continual increase of the Bank of England Base Rate and, no doubt more to come on the 4th of August!

In every instance, the mortgage lender has stipulated the EPC rating must be C or above in order to gain the new product.

I think this will be across the board with all mortgages now, soon or in the future, regardless of it not being a statutory requirement (as yet) to rent out our properties.

Has anyone else found this issue yet?

Ann



Comments

Beaver

9:53 AM, 3rd August 2022, About A week ago

Reply to the comment left by Jason English at 03/08/2022 - 07:47
"If a property is on heating oil and it moves to ASHP the EPC actually gets worse?" Is that right? And why is that? Does that mean that if I'm on gas and I move to oil the EPC gets better?

Graham Bowcock View Profile

9:54 AM, 3rd August 2022, About A week ago

To be honest, it sounds unlikely that the mortgage company or broker would give you a misleading answer.

The EPC regime is evolving, so not absolute at the moment.

Beaver

10:05 AM, 3rd August 2022, About A week ago

Reply to the comment left by Alan Carter at 03/08/2022 - 05:46
This Houzen link you copied and pasted says "At present, the building materials and construction sector accounts for an estimated 40% of total global greenhouse gas emissions. " Where I live the developers are falling over themselves to dig green fields up and put houses on them. Regardless of the objections communities make the developments go ahead regardless. And none of what's being built near where I live has either photovoltaic tiles or panels.

Not allowing you an EPC rating that would allow you to rent a property because your property has solid walls isn't going to fix any emissions problem.

TD

10:25 AM, 3rd August 2022, About A week ago

EPC rating impacts energy costs which impacts tenant affordability and risk.

I'm reliably informed by my broker that some lenders have always only allowed energy efficient homes, many just offer better rates for C and above, almost all will offer on a D but with less favourable rates.

Who was your lender?

DSR

11:05 AM, 3rd August 2022, About A week ago

not in this position but..

surely you can ask the bank to qualify why a C grade is necessary as part of their BTL 'offer' when its not even on the statue books yet?

Be an interesting response....

Lorraine Clayton View Profile

11:13 AM, 3rd August 2022, About A week ago

Lots of changes coming in this space. This is likely to become common place with lenders for standard mortgages. There has been an increased number of epc requests amongst colleagues highlighting this very reason

Graham Bowcock View Profile

11:18 AM, 3rd August 2022, About A week ago

Reply to the comment left by DSR at 03/08/2022 - 11:05
Whilst C bands are not yet legally required, it's coming. The banks are using their lending criteria as part of their own environmental management/carbon footprint.

My neighbour is in charge of this policy for a high street bank and we have talked it through. I am also seeing it in my day job as a valuer and managing agent.

Anthony Endsor

11:36 AM, 3rd August 2022, About A week ago

For many people, this is going to make it practically impossible to buy a new property, as so few are C or above at the moment. Upgrading whilst already owning can be done, albeit at great expense, but if you can't get a mortgage to buy, this is going to be another contributory factor to a further shortage in BTL property.

Rod

12:16 PM, 3rd August 2022, About A week ago

Reply to the comment left by Amzac Estates at 02/08/2022 - 19:03I was wondering when someone would point out that the standards indicated in the consultation are not a legal requirement, but have been allowed to be talked into becoming the de facto requirement.
The team at iHowz keep pressing the Government to publish the requirements. (Something similar applies to the Decent Homes Standard proposal in the White Paper.)
https://ihowz.uk/the-anticipated-standards-for-the-minimum-energy-efficiency-standards-mees/
While those with easy to insulate properties, heated with gas may not find it too arduous getting our properties to an EPC of C, Jason's example of switching to, or upgrading, electrical heating continues to be a challenge for these landlords.
That's without mentioning that 3 west London boroughs are restricting new development due to the electrical network being close to capacity.
Sure, lenders want to ensure that when the standards apply, their landlord will still be able to rent the property so that they can pay the mortgage.
Likewise, EPCs are required for the sale of all property, so a higher EPC should make a property more saleable should the bank need t repossess.

Jason English

13:12 PM, 3rd August 2022, About A week ago

Reply to the comment left by Beaver at 03/08/2022 - 09:53
Unfortunately yes, I have person experience of this too. Currently EPC's do not favour ASHP they favour gas. There are many articles online if you are interested. Here is one example..
https://www.yorkshireenergysystems.co.uk/epcandheatpumps/

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