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  • Refurbish/Develop

    EPC improvement strategy - Brightstar

    Welcome along to the next instalment of our "Smart Landlord" 2019 campaign.  We hope you have been enjoying the series.

    You've heard of smart phones, smart highways, smart meters ... well, this month, to celebrate our 10th anniversary, Property Tribes champions the concept of the "smart landlord" as we believe that is the profile of the landlord who will survive the current challenging market conditions and taxation and regulatory landscape.

    Smart things are adaptive to change, problem solving and always seeking out efficiencies to operate more smoothly and at a higher level, and that is how the smart landlord approaches their business.

    In the mind map above, you will see the trait "I am opportunity hungry".  Smart landlords are always looking for the angles and opportunities that others may have missed.

    A new product from Precise offers an angle for forcing the appreciation of a property through improving the EPC rating.

    I spoke to Jeff List, Head of Buy to Let Mortgages at Brightstar Financial about this innovative product and also to find out his views on what smart landlords should be doing in 2019:

    To explain forcing the appreciation through improving the EPC rating in more detail ...

    Legislation that came into effect last year states that landlords can not legally let out properties with the two lowest energy efficiency ratings, F and G.

    Therefore, you cannot secure a buy to let mortgage against such properties, as they are un-lettable.  That puts transacting on these properties firmly into the cash buying arena.

    The Precise product provides bridging finance to purchase an un-mortgageable property due to too low EPC rating.

    Landlords can then improve the property by refurbishment and energy efficiency improvements, thereby increasing the EPC rating to E or above, which now makes the property mortgageable, and therefore the value will increase.

    The improvements that could save you the most energy depend on your property, but typical examples include:

    • insulation, eg solid wall, cavity wall or loft insulation
    • heating
    • draught-proofing
    • double glazing
    • renewable energy generation, eg solar panels or heat pumps.

    Landlords can also do simple inexpensive things, like changing lightbulbs and down-lighters for LEDs.

    The landlord can then move to term finance, using LTV on the new value, and pulling back some of their cash after the bridging loan has been redeemed.

    This product is ideal for:

    • Properties needing works to meet minimum EPC rating, such as boiler replacement
    • Properties purchased at auction that require light refurbishment to be acceptable for mortgage purposes (including new kitchens and bathrooms)
    • Landlords choosing to refurbish in order to maximise the rental yield of their property (including HMOs but not change of use to HMO)
    • Properties bought under valuation

    Click on this banner to find out more about this EPC-enhancing product:

    In February, we will be running "Finance Innovation Insights" Week powered by Brightstar and the video content we recorded for this earlier this week was extremely educational and includes information on the use of bridging finance and second charge mortgages.

    While on the topic of EPCs, a reminder that Property Tribes has its own EPC on-line booking service where you can book an EPC for a fixed fee of £59.00 inc. VAT nationwide:

    The PT service can also be used for commercial EPCs.

    Stay tuned as "Smart Landlord" 2019 continues until the end of January!

    SEE ALSO  -          Energy efficiency 2018 - threat to landlords

    UP NEXT -              Top tips for up-grading a rental property 

    DON'T MISS -         10 tips for spotting property deals others might have missed.



    This lateral thinking and seeing the angle is absolute gold dust!  Thanks for bringing this interview.


    Thank you for your kind feedback. Smile

    I think that sometimes you should see the opportunity of the strategy and product FIRST and then go and look for a suitable property.  This is one of those occasions imho.