Can you get a mortgage on property with low energy efficiency?

Can you get a mortgage on property with low energy efficiency?

10:25 AM, 18th December 2017, About 7 years ago 10

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There are some elderly flats which I have seen for sale. They have an energy efficiency of only F and they are Grade 2 listed.

From April it will be unlawful to rent them out in their current condition and energy efficiency rating.

What is the mortgage markets point of view and criteria currently for these types of properties?

Could you raise a mortgage on them?

Will English heritage allow improvements to make them lawful to rent out?

Many thanks


Editor’s Note from .Gov Click Here

Listed Buildings and EPC Compliance

There is a common misunderstanding regarding listed buildings and whether they are exempt from the requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC and it will be up to the owner of a listed
building to understand whether or not their property is required to have an EPC. Where a listed privately rented domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards.

An EPC is not currently required for a listed property or building within a conservation area when it is sold or rented in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. Examples of energy performance measures which may alter character or appearance (or as a minimum are likely to require local authority planning permission to install on a listed building) include solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump. Where character or appearance would not be altered by
compliance with energy performance requirements, an EPC may be legally required.

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Neil Patterson

10:36 AM, 18th December 2017, About 7 years ago

Hi David,

Please see our article on the new energy rules "Minimum Energy Efficiency Standards – EPC rating E by April 2018" >>

I will also see if one of our mortgage team can help answer your question as well.

Rob Crawford

10:47 AM, 18th December 2017, About 7 years ago

Don't forget that once having read the regulations and determined that your property is exempt, make sure you register this as such in the Exemptions Register.

Howard Reuben Cert CII (MP) CeRER

11:55 AM, 18th December 2017, About 7 years ago

Because the new rules don't actually come in to force until next year and there are enough new rules, regs, criteria and system changes for the lenders and brokers to deal with at the moment anyway, so the response I am getting from a lot of the banks is that the EPC restrictive measures are not a top priority to implement right now.

But, they will be, from April/May 2018.

If the energy rating is A-D, this should remain fine. If it's an E or below, this could affect the mortgageworthiness of the property.

I can't comment for English Heritage, but as far as the mortgage marlet is concerned and your question "What is the mortgage markets point of view and criteria currently for these types of properties?", I would say if you need to finance low rated properties, that you should do it now rather than later, or of course invest in the property (if you are refinancing a property which you own) and increase it's EPC rating.

All previously rated / registered properties can be seen here >

If you need an EPC survey / report, you can get one from here >

Hope that helps

Graham Bowcock

12:21 PM, 18th December 2017, About 7 years ago

Dear David

My firm undertakes mortgage valuations. Some banks have been asking for EPC details for some time, although all banks want outline details. Where a property has a low banding we are now having to comment to the banks about the implications. This may include recommending that the borrower undertakes to comply with the EPC recommendations. From the lender's point of view it is really a question of value (and saleability)and what a low EPC will do to it.

It is interesting that there is an EPC for a listed building as there is no immediate requirement; this create a problem as everyone now knows the EPC banding. I have had exactly the same situation with a property earlier this year (i.e. low band EPC on a listed property). I concluded that this was not a problem for two reasons; firstly, the location was such that there would be a strong demand and, secondly, the property was to be refurbished to let anyway, so it is likely that any EPC defects would be rectified.

Lenders will no doubt have concerns as we get closer to April 2018, and the subsequent compliance dates. My advice is to proceed with caution in terms of offers and allow for any rectification works in the purchase price. Whether or not lending is available may well depend on lenders' policies and values' comments.


david porter

13:30 PM, 18th December 2017, About 7 years ago

Reply to the comment left by Graham Bowcock at 18/12/2017 - 12:21
Of immediate concern is that there are high ceilings and consequently very big windows. These are single glazed. Double glazing would be important but perhaps would not be allowed as the building is listed?

Monty Bodkin

16:50 PM, 18th December 2017, About 7 years ago

Reply to the comment left by david porter at 18/12/2017 - 13:30
Look at fitting secondary glazing instead.

david porter

17:31 PM, 18th December 2017, About 7 years ago

Reply to the comment left by Monty Bodkin at 18/12/2017 - 16:50
The USP here is the high status apartment within a building
of "aristocratic demeanour"- ( some agents have big dictionaries)
and so secondary double glazing would detract for this?

Wyn Burgess

10:02 AM, 23rd December 2017, About 7 years ago

The problem with EPC's for me is that they are often inaccurate, maybe speak to the EPC assessor and determine the most cost effective way of improving the rating to what you need eg application of insulation backed plasterboard to solid external walls, condensing boiler etc.

david porter

10:45 AM, 23rd December 2017, About 7 years ago

What you can do is limited by what you are allowed to do to a listed property.

david porter

14:59 PM, 9th March 2018, About 6 years ago

I posted this the other day as a new item. Has it got lost?
During the recent inclement we had a gas heating boiler fail.
We were told that a circuit board had failed and this was the cause. We were told that the component was obsolete and a replacement was unavailable and so a new boiler was needed.
And so delivery time etc cost etc. We found the item manufacturer and part number and looked up the internet . We found a company who will refurbish. We have posted it off and they will repair in one day and post it back.
Total cost £90 but more importantly minimise tenant inconvenience.

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