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  • Mortgages & Finance

    EPC ratings now affecting mortgages & lending



    For the past three years, Property Tribes has been alerting landlords to the new Minimum Energy Efficiency Standards for rental properties which come into affect on the 1st April 2018.

    The following is a post courtesy of mortgage broker Lisa Orme on the HMO Group on Facebook which shows that EPCs are now affecting mortgages and lending:

    Just a reminder that from April you will not be able to issue a new tenancy or renew an existing tenancy if your property is rated F or worse.

    You can continue with a periodic tenancy.

    From April 2020 ALL rental properties will require an EPC of E or better even if periodic.

    If you cannot achieve an E or higher rating for a specific reason then you must apply for an exemption.

    Lenders are now requesting EPCs. If you are not achieving the correct rating they will not lend.

    In addition they are checking your background portfolio too and any that are not E or above will be regarded as void and as such the rent will be disregarded for portfolio stress tests. The mortgage will still be included in the calculation however.

    Source post



    SEE ALSO  -          Energy efficiency 2018 - threat to landlords

    UP NEXT -              Commercial properties at risk as MEES looms

    DON'T MISS -         Top tips for up-grading a rental property

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    Yes - unfortunately so.

    So far we have had conditions put in some offers, saying the landlord must improve the EPC by X date.

    No retention's, etc.. so far.

    See Also: How are mortgage lenders implementing the rules?

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    _________________________________________________________________________


    My posts are not financial advice but often me rambling - passing time on a coffee break.
    Our team at Bespoke Finance offers Limited Company Buy-to-Let and Cheap Life Insurance.

    _________________________________________________________________________


    Do they make allowances for properties with exemptions?

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    Acknowledging exemptions would be sensible, if you can get past the first gate and speak with a real person who understands the topic!

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    A specialist buy to let lender is making changes to its lending conditions to ensure its residential and commercial borrowers conform with new MEES energy efficiency rules.

    It is though that OneSavings Bank, through its Kent Reliance and InterBay brands - is the first to link the new energy standards with the granting of buy to let loans.

    Full/source article 

    On the topic of EPCs, a reminder that Property Tribes now offers an on-line nationwide EPC booking service.

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    This MEES stuff is going to make life very awkward  for those LL with an F or G status property

    Unless exempt they won't be able to be listed on the major Web portals.

    I see such properties disappearing into the LL black economy.

    Such properties won't ever be listed but they will still be let.

    Illegal LL will continue  to operate just as they have always done

    The PRS is full of criminal activity.

    It is very hard for it to be detected.


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    Foundation Home Loans has made changes to its but-to-let criteria for landlords seeking fresh funds to help acquire property, in response to the new energy performance certificate (EPC) regulation which came into effect over the weekend.

    Properties registered with the specialist lender, available only through intermediaries and designed for clients with more complex needs, are required to meet the minimum EPC standard, a rating between A and E. Properties failing to meet this standard (those with a F or G rating), require improvements to be made and a new EPC rating supplied, within the acceptable range before completion.

    Full/source article

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    MEES also applies to grade 2 listed buildings according to my research.The only way to find out if you can apply for exemption is to carry out an EPC and if the  the property can only be improved to the minimum E grade by making alterations to the appearance then you can apply for exemption however if you can improve to E by such things as loft insulation a new condensing boiler and up grading lighting then  the property must have an EPC.

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    I know of certain buildings that certainly should be exempt from having EPCs, but they aren't generally for rent. This one is available as a holiday let.


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    Barclays is next week launching a so-called ‘green mortgage’ which links the loan to the Energy Performance Certificate rating of the property being purchased.

    It will reward buyers who choose an energy efficient new build home with lower interest rates. It’s the first mortgage to offer preferential rates based on the EPC of a home.

    Full/source article

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    ... from a selected few of new build providers as I understand.

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    _________________________________________________________________________


    My posts are not financial advice but often me rambling - passing time on a coffee break.
    Our team at Bespoke Finance offers Limited Company Buy-to-Let and Cheap Life Insurance.

    _________________________________________________________________________