Landlords worry they can’t afford green property upgrades amid rising costs

Landlords worry they can’t afford green property upgrades amid rising costs

8:01 AM, 27th September 2022, About 2 months ago 4

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Rising costs are piling the pressure on private landlords who say they can’t afford to implement the measures needed to improve their rental property’s EPC rating, a bank says.

The Secure Trust Bank has found that investors and landlords fear that they will not hit the government’s proposed energy efficiency targets for their rental homes.

There’s no doubt that the PRS has come under mounting pressure to raise energy efficiency standards with official statistics suggesting that more than half of the homes in England are rated D or below for energy efficiency.

And now industry experts are expecting the regulatory requirements for UK landlords will tighten ahead of the Future Homes and Buildings Standard in 2025.

Mike Feasey, the relationship director at Secure Trust Bank says landlords and investors are in an increasingly difficult position.

‘Upgrading their property’s energy efficiency credentials’

He said: “We’re getting a lot of feedback from private landlords that high costs are proving a barrier when considering the benefits of upgrading their property’s energy efficiency credentials.

“The government is piling on the pressure by proposing that all rented homes should fall into the A-C bracket for new tenancies by 2025 and for all tenancies by 2028, but the cost of upgrading is becoming more expensive by the day.”

The BCIS Material Cost Index is forecasted to reach 17.5% by the end of 2022 with a high degree of volatility across all material categories.

Private landlords also need to factor in the increase in labour costs for tradesmen to complete any upgrades to their properties.

However, Mike says doing nothing is not an option.

‘Costs can quickly rise through inaction’

He said: “The clock is ticking, and costs can quickly rise through inaction.

“The cost of retrofitting existing buildings with green and sustainable measures will, in all likelihood, continue to rise and make it more difficult to recoup the cost of that investment throughout the remaining life of a property.”

Secure Trust Bank relaunched its popular Green Residential Investment Loan earlier this year with the aim of incentivising small to medium sized investors to invest in energy efficient homes.

Mr Feasey believes private landlords and investors do have options and said: “Residential investment loans for investors to acquire or maintain an existing stock or release equity to fund further energy efficient residential projects are an option worth considering.

“Doing nothing is not an option because the danger is that landlords and investors will be left with properties that cannot be let and may prove difficult to sell.”



Comments

DSR

10:17 AM, 27th September 2022, About 2 months ago

"Doing nothing is not an option because the danger is that landlords and investors will be left with properties that cannot be let and may prove difficult to sell.”

Doing nothing is the only option at present, when there is no proper consistent direction from government about just how they are going to address the issue exactly!

It could be FAR more expensive now for a LL to take a decision use the current situation of increased labour charges, and high supply costs to make changes to a property which at best will not achieve a (potential C rating) plus the cost of the work being deemed outside the (potential) timings for it to be classed within the (potential) £10k exemption level!

Luke P

11:13 AM, 27th September 2022, About 2 months ago

I think Govt. knows it’s not a realistic proposal and are holding out making their final decision because in the meantime some LLs panic and do the upgrades anyway.

Mick Roberts

6:37 AM, 28th September 2022, About 2 months ago

Reply to the comment left by DSR at 27/09/2022 - 10:17
Well said DSR, we han't got a clue what is needed.

Mick Roberts

6:39 AM, 28th September 2022, About 2 months ago

Reply to the comment left by Luke P at 27/09/2022 - 11:13
And u Luke. We have no idea and many landlords are going ahead.
Govt think all Landlords are desperate to keep their houses, and will spend whatever. Not having a clue many of us don't even want our house's and only keeping it for the current tenant as they can't get anywhere. And if push us too far to spend 30k on a house we don't want, we'll sell.

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