Landlords prioritise energy efficiency despite government policy changes

Landlords are now prioritising energy efficiency when purchasing a new investment property, according to new research.

Data from The Mortgage Lender, reveals a quarter of landlords (25%) are now placing a strong emphasis on energy efficiency when buying new properties for their portfolios.

This comes despite the government scrapping EPC targets which would have required landlords to ensure their rental properties had a minimum EPC rating of C.

Landlords are staying ahead of the curve

Chris Kirby, head of sales – Midlands, South and specialist distribution at The Mortgage Lender, said: “It’s encouraging to see that BTL landlords are continuing to adapt and shift their priorities, even though the government postponed the planned introduction of energy efficiency standards for properties in the private rental sector.

“It shows just how committed many landlords are to staying ahead of the curve and anticipating tenant expectations.”

The study also sheds light on the various factors influencing landlords’ property purchase decisions.

While monetary considerations such as price (48%), expected rent yield (29%), and long-term investment potential (23%) remain crucial, other factors such as location (29%), council tax banding (17%), property readiness (16%), and interior layout (16%) also play a significant role.

Mortgages are a key priority for landlords

The research also asked how BTL landlords will buy their next rental property. A quarter (24%) said they would buy as an individual investor with a mortgage, and a further fifth (22%) said they would buy as an individual with cash.

In contrast, 10% said they will buy their next property as a limited company with a mortgage, while 11% plan to buy as a joint investor with a mortgage.

Mortgages continue to be a key priority for landlords amid a tumultuous year for rates. Three out of four (77%) of landlords said that the rate of the mortgage available was an important factor for them when buying a property with a mortgage.

Other factors landlords felt to be important included wanting greater fluidity from lenders such as in the amount they could borrow (76%), the discount on fees (72%), flexibility on criteria (72%), and the support offered by the lender (70%).