Lender offers landlords £50m to help enhance energy efficiency

Lender offers landlords £50m to help enhance energy efficiency

8:01 AM, 25th November 2022, About 2 years ago

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Buy-to-let landlords who want to improve the sustainability of their investment properties can access a lending fund with lower mortgage rates worth £50m to help.

Leading specialist lender OSB Group has unveiled a package of targeted measures to support landlords after a report they commissioned revealed that 44% of brokers believe the biggest challenge facing their landlord clients is complying with new environmental requirements.

Landlords themselves cite this as their second biggest concern, after tenant affordability due to the rising cost of living.

Landlords who want to deliver environmentally friendly homes

Now OSB Group, which includes Precise Mortgages, Kent Reliance for Intermediaries and InterBay, is launching a package of measures to support landlords who want to deliver environmentally friendly homes for rent. The package includes:

A new Landlord Leader Fund to support OSB Group’s existing landlords to improve their properties to an EPC rating of C or above in 2023. The fund makes an initial £50 million of ear-marked lending available at subsidised mortgage rates, covering both new loans with refurbishment needs and standalone refurbishment projects (subject to criteria)

A new product range in 2023, delivered through the Landlord Leader Fund, with accommodating LTVs and ICRs during refurbishment, to improve the property value and appeal to tenants

Enhancements to products and processes in 2023 to support more landlords on the journey, by managing property voids while works are being undertaken to improve energy efficiency

A redesigned underwriting process for existing landlords, including ensuring our teams are trained to understand the complexities of the property upgrades so they can effectively assess the properties involved

Partnering with tax specialists who can provide advice and guidance on tax planning for part-time landlords looking to professionalise, including incorporating as a limited company and the treatment of qualifying capital expenditure.

Landlords likely to be upgrading their property portfolios

The research also found that professional landlords, who derive their main income from lettings, were more likely to be upgrading their property portfolios already to make them more environmentally friendly.

And they are far more positive about the future of the buy-to-let sector than their part-time counterparts.

Researchers also discovered that both brokers and landlords were looking to lenders to offer more than the green financing currently on the market to fund property improvements.

Alongside its initiatives, OSB Group is launching a series of new industry partnerships, piloting new uses of data to help tenants and landlords to make informed decisions.

These innovators include Sero which provides landlords with a free detailed survey for delivering a pathway to a Net Zero home with other partnerships to follow.

Creating a Landlord Leaders community

The specialist lender is also creating a ‘Landlord Leaders’ community to bring together brokers, landlords and other industry members to develop a collective manifesto for change in the first half of 2023.

Andy Golding, the group chief executive of OSB Group, said: “The time has come for the private rented sector to seriously consider what is next.

“We are on the precipice of change which will create significant benefits for tenants, but at what cost?

“There is an opportunity for the industry to rise to this new challenge and help support both professional and part-time landlords to ensure the industry thrives and continues to focus on its tenants.”

He added: “OSB Group is proud to partner with and support brokers, landlords and tenants across the industry and hope that the measures we plan to implement over the next couple of years will continue to drive positive, tangible change across the industry.

“We call on other industry participants to consider more actions that need to be taken to ensure the right support structures are in place.”

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