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  • Buy-to-Let

    Importance of good energy efficiency ratings?

    I recently viewed a property that had a very poor energy efficiency rating of G and an enviro impact of F rating.

    I see from old posts that this would not be acceptable to be let out! I am wondering what the latest and/or forthcoming legislation is about this.

    The property i've viewed didn't seem that bad, it was a mid terraced house, had double glazing throughout and very thick insulation in the loft and some kind of insulation/padding in the roof space. It had no central heating though and a coupe of electric radiators apart from that i could not see any big problems.

    I know very little about the ratings certs, rules or how they are applied, seems to be little info about it.

    How would a bad cert be improved without spending a fortune, what exactly are the criteria are they looking for, and how would you know if a house would be approved with a decent rating, i.e where would you spend the money improving things?

    How critical is it for lettings and would a poor cert put you off buying a property?

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    The assessor normally writes the recommendation within the certificate itself.

    A new boiler accrues a good few points so an easy way to increase rating by at least one letter at the minimum. Make sure all the bulbs are energy saving which is a cheap one to achieve. 

    It might be that the walls aren't insulated. Have a look in the cert to see what it recommends. It shows the maximum you could achieve.
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    Saagar

    Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences. 

    Basically this property needs GCH to get an acceptable EPC rating of a minimum of E grade to be let currently and it is mooted to soon go to C grade as minimum for letting - so I guess you are looking at £3k to £4k to install a complete GCH system.

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    And of course, taking into account the changes in legislation, re installation of new gas boilers from 2025!

    https://www.boilerguide.co.uk/articles/t...ng-in-2050

    If EPCs are currently downgrading properties because they don't have gas central heating, I wonder when will this change, so that gas boilers aren't seen as a better option?!

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    Helen Godbold-Eade

    Freelance Administrator for Property Investors / Entrepreneurs

    http://www.like-clockwork.co.uk

    Find me on LinkedIn: http://www.linkedin.com/in/heleneade/

    Quite so - my understanding of EPC regs is the core ethos was "Gas is good - Electric is bad" in terms of domestic fuel costs - so newbuilds from 2025 will likely have more expensive heating costs unless insulated to nth degree.

    At present build rates - we are adding circa 1 million new builds every 5 yrs - against a total UK stock of over 25 million homes - so it will be many decades before newbuilds in aggregate comprise more than a minute portion of total housing stock.

    I do not know how the legislation has/will be framed exactly - ie will it preclude a buyer of a new home from later installing GCH - or is it just the developer who is prevented from installing GCH? Electric wet CH boilers can be easily installed but all relevant PT threads suggest they have horrendous running costs. Ground/air source heat pumps also sound impractical in real world scenarios.

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    A lot of unknowns, that's for sure!  The different departments need to be communicating.  Isn't this what leads to a lot of problems, eg. with fire safety measures, when one department says this cladding is acceptable, whilst that department says the same cladding is not?!

    No chance of property investors being bored on winter's evenings....always something to be reading up on ;-)

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    Helen Godbold-Eade

    Freelance Administrator for Property Investors / Entrepreneurs

    http://www.like-clockwork.co.uk

    Find me on LinkedIn: http://www.linkedin.com/in/heleneade/

    Yes most public bodies seem to operate with a silo mentality - allied to a box ticking mentality engendered by the current ethos of accountability being satisfied with those tick boxes and thus avoiding litigation.

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    I couldn't have put it better myself ;-)

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    Helen Godbold-Eade

    Freelance Administrator for Property Investors / Entrepreneurs

    http://www.like-clockwork.co.uk

    Find me on LinkedIn: http://www.linkedin.com/in/heleneade/

    I would recommend reading this article as not only is the property un-lettable, it is also un-mortgageable:

    Energy efficiency 2018 - threat to landlords 

    If you purchased it at a deep discount for cash or bridging, made it lettable, you would then add value and be able to re-finance to redeem the bridge/cash.

    This video has details of a special product that works well in this scenario:



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    Epc’s are to some extent a farce, they rely on standard assessments and lots of assumptions. For the property you refer to without a doubt gfch will make a huge improvement to the rating, you don’t mention hot water provision, if this is via an immersion and old hot water tank its another area for easy improvement.  As stated the epc should have suggested improvements.
    You could use modern storage heaters and either instantaneous water heater or a modern insulated tank. But most people prefer gas.
    When i last spoke with my local council regarding the epc  level and being able to rent, it was unenforceable as the legislation was written around the availability of the green deal, once it had been scrapped the legislation was itself invalidated. Action could be taken under HHSRS but that means having a tenant in place and is more complicated to enforce.
    There is/was new legislation being formed , it may well be its in place, but must be said i’ve not kept up with it as my property all achieves a c/d.
    As for the end of gas in 2025, it ain’t gonna happen, in anything other than newbuilds it’ll so horrendously expensive as to be unaffordable to the nation. 
    Rather expect a tightening of insulation standards and efficiency of appliances etc over time.
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    EPC is critical for lettings, and some useful suggestions above for improving the rating. Has the property been valued accounting for being unmortgageable and unlettable in its current condition? If the property has been rated G then read the report and that will give some clues about what needs improving...for sure installing central heating with an efficient boiler will be a plus. One thing you could try is offering to buy the property, subject to a delayed completion of a suitable length of time, along with the owners consent to install central heating and make other energy efficiency improvements. You could also try contacting the EPC assessor on the existing report and discuss what would be required to get it to a decent rating. I would also do as much as you can to improve it so you are then increasing the value of it and making a nicer, lower cost home for people to live in.

    Best,

    Guy
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    Guy Brown
    Blue Infinity Property Group
    M 07791-661491 | T 0118 3360366 | E guy@blueinfinityproperty.com<script data-cfhash='f9e31' type="text/javascript">/* http://www.blueinfinityproperty.com

    * New build residential developments and flat conversions in the Home Counties
    * High end HMOs in Reading and Bracknell