Property News > Why it pays to make your rental property more energy efficient – and how to do it

Why it pays to make your rental property more energy efficient – and how to do it

Demand for London property is bouncing back according to Rightmove’s latest data, as the return to offices and major cities continues, with large numbers of people once again on the lookout for somewhere to live within easy commuting distance of their workplace.

This is presenting plenty of opportunities for both landlords and sellers across the capital, but with the government’s rules surrounding EPC ratings due to come into effect in just three years, and 60% of the UK’s current housing stock still rated D or below – the scale of the challenge is clear. 

Landlords and sellers can face spiralling costs when it comes to implementing these changes to their rental property, with research suggesting that the typical upgrade can cost anything between £6,000 and £10,000.

Sundeep Patel, Director of Sales at Together – the specialist lender – commented: “The proposed Minimum Energy Standards for rented properties will shift from an E rating to a C rating under the new rules, and making changes isn’t optional. The new regulations will be introduced for new tenancies first from 2025, followed by all tenancies from 2028.

“If your property is found to fall short of the required rating, you could face a fine of up to £30,000. Plus, you’ll have an unlettable property on your hands, which is not only a waste of essential residential resource, but also means you’ll incur a loss of rental income.”

To help finance this, short-term funding by way of a bridging loan or a longer-term agreement such as a second charge loan can both work well depending on circumstances, whether your energy efficiency improvements are being carried out on their own or you’re looking to tie it in with some general upgrades to spruce up your property. 

The investment could be covered by a bridging loan if the work will be done within 12 months, as once it’s complete, you could look to refinance onto a new buy-to-let mortgage after you’ve increased the value of the property. 

Alternatively, you may want to consider a second charge loan if you don’t want to refinance, or you’re looking to make your improvements over a longer period of time. This will run alongside your current mortgage but will be completely separate, giving you the option to end it earlier than your existing buy-to-let mortgage. If you wanted to, you could borrow over a period as short as four years. 

If you’re keen to make eco-friendly changes to your property but you’re not sure where to start, Sundeep Patel, Director of Sales at Together shares a few simple ways to achieve it:

Related Articles

How the Leasehold Reform Act will impact homeowners and landlords

Leases come in all shapes and sizes, and so dealing with the buying and selling of leasehold residential property can sometimes trigger feelings of dread among conveyancers, as they really ...
View >>

Five top tips to ensure moving house remains hassle-free

Last year saw a 15% rise in the number of Brits looking to move house, but it’s no secret that the process has the potential to be one of the ...
View >>

What impact will NFTs have on the real estate industry?

In recent years, home buyers of the social media-savvy generation have been increasingly on the lookout for other solutions beyond the status quo when it comes to real estate. Advertising ...
View >>

Need Help?

Thank you. We will give you a call back as soon as possible!
Name *
Email *
Phone *
When would you like a callback? *