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New EPC Legislation Nightmare For Landlords

Posted on Thursday, December 2, 2021


New EPC Legislation Nightmare For Landlords

I’m being constantly asked this question so thought I’d discuss my own views upon it.

 

Is now a good time to buy?

 

There’s no straight answer. Yes, it’s a great time to buy now as there is a housing shortage that will continue for years and years to come. Stoke-On-Trent terraced housing market is very desirable as it offers landlords cheap affordable rentals with great yields, however, is this buddle about to burst?

 

In 2028 the government is proposing on increasing the minimum level EPC rating from an E to a C, yes to a C.

 

 What effect will this have on investors?

 

To get a typical house from an E to a C is going to costs thousands of pounds, The average D-rated property would need on average £12,746 spent to reach a C band, according to analysis by Savills.

 

Almost 1.7 million homes in England and Wales with an EPC rating between D and G cannot be improved to reach a C rating, according to new research by Rightmove.

 

Not many investors are going to have the funds for this and investors with multiple investments are literally going to be hit very hard. Where are the funds coming from for the upgrades?

 

This brings me to the conclusion of a mass exodus of investors who will just choose to sell up rather than having the expense of trying to achieve a C. Those with small portfolios will not have the funds and those with large portfolios may just sell a few houses to cover the expenses, either way, we may see a dip in the market and certainly a cooling down as first-time investors would need to get that EPC to a C so extra funds will be needed. Another problem that may arise, will a lender lend on a property where the EPC is higher than a C? they won’t lend on one today where the EPC is higher than an E.

 

2026 to 2028 are certainly going to be interesting years.