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Landlords face whopping £420m bill to meet Government’s new energy standards PDF Print E-mail
Thursday, 29 March 2018
Ahead of the Government’s implementation of its new Minimum Energy Efficiency Standards for UK rental properties this weekend, new analysis today reveals that it will cost landlords in excess of £400 million to make the home improvements needed to comply with the updated regulations. 

From 1 April 2018, landlords could face fines of between £4,000 to £150,000, or even be banned from renting out their properties in England and Wales if they fail to meet a minimum Energy Performance Certificate (EPC) rating of E. While this will initially apply only to new tenancies and renewals (before being extended to all existing tenancies by 2020), the latest industry data estimates that around 300,000 rental properties currently fall below the new minimum energy standards.

With a recent report from the UK Green Building Council calculating that the average cost of raising an F or G energy-rated property to the required minimum E standard is £1,400 - typically through the installation of new loft and cavity wall insulation, a modern boiler or double-glazed windows - this brings the total bill for affected landlords up to a sizeable £420 million.

However, experts warn that portfolio landlords with multiple properties and limited liquidity must act quickly to secure the necessary finance to make these energy improvements and avoid the potentially significant fines that could cripple their business interests.

Marc Goldberg, commercial CEO at Together, said: “At a time when their profits are being seriously squeezed following a swathe of new tax and regulatory changes impacting the buy-to-let sector, landlords are feeling increasing pressure on their cashflow this year and can ill afford the potentially huge fines that could come their way if they miss the upcoming EPC improvements deadline.

“While the vast majority of landlords understand that enhancing the energy efficiency of their properties will boost rental yields over the long term, unfortunately many don’t have the available cash to hand to fund the urgent home improvements that are needed. Although the estimated cost of updating a single rental property isn’t too much of a stretch, the average UK landlord has around eight properties in their portfolio; a scale at which costs can very quickly spiral out of control.

“For any landlords who find themselves in this position, specialist lenders like Together are on hand to provide the finance they need through dedicated short-term loans. We recently launched a new product supporting property investors carrying out refurbishments, including improving their properties’ energy efficiency, which can be approved in a matter of days for any landlords who have left it to the last minute.”
 

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