The Mortgage Works, the buy-to-let lender of Nationwide, is piloting support to help landlords understand what improvements they need to make as part of incoming energy efficiency requirements by 20301.
At the same time, The Mortgage Works will be supporting landlords to cover the cost of the necessary upgrades by introducing new further advance products with discounted rates.
The initiative comes as there remains a significant gap in awareness and preparedness amongst landlords. Research from The Mortgage Works2 shows:
- Two-thirds (67%) of landlords are unaware that properties will need a minimum energy efficiency rating of ‘C’.
- 73% don’t know when the new regulations come into force – leaving many at risk of inaction with just over four years until implementation in England and Wales.
Free property assessments:
As part of the pilot, The Mortgage Works will fund 1,000 property assessments for eligible3 landlords, delivered in collaboration with retrofit specialist, Eco Approach. These assessments will:
- Show how far the properties are from an Energy Performance Certificate (EPC) C rating.
- Provide tailored recommendations and estimated costs on how to improve the EPC rating.
- Help landlords understand any exemptions or exceptions.
- Inform the landlord of any grants that would be available to the property.
- Provide support with carrying out the work4.
The pilot will be used to test landlord demand and engagement, with a view to rolling the service out to all The Mortgage Works’ customers.
According to The Mortgage Works’ research, landlords are very much open to receiving support – over half (55%) would value help in identifying the most cost-effective improvements, while 50 per cent would benefit from guidance around financing5.
New, discounted Energy Efficiency Further Advance products:
Alongside the assessment pilot, The Mortgage Works is launching two new ‘Energy Efficiency Further Advance’ products, offering rates around two per cent lower than The Mortgage Works’ standard further advances.
The two and five-year fixed rate products are available up to 75 per cent Loan-To-Value and will both have a rate of 2.99%. They will be available to existing buy-to-let, buy-to-let large portfolio and limited company buy-to-let customers.
These new products are well placed to help landlords fund the improvements required. According to research from the National Residential Landlords Association6, 42 per cent of landlords say cost barriers are very or extremely significant, underlining the scale of the challenge.
Uncertainty around costs remains another key obstacle. Research from The Mortgage Works5 shows 63 per cent of landlords are unsure of how much it will cost to bring their properties up to an EPC ‘C’ rating.
However, 21 per cent5 estimate spending up to £6,632 on average, depending on the property’s current value. This level of investment would fall well within the maximum borrowing available through the Energy Efficiency Further Advance.
Strong incentives for landlords to act now:
According to The Mortgage Works’ latest buy-to-let report, A or B-rated properties command a 12.2 per cent price premium over similar D-rated homes, while C-rated properties achieve a 3.7 per cent uplift.7
Rental income also benefits – A or B-rated properties attract an 8.1 per cent premium (around £85 per month based on average rents of £1,075), compared with a more modest 1.8 per cent uplift for C-rated properties (around £20 per month)8.
Dan Clinton, Head of Buy to Let at The Mortgage Works, said: “We know many landlords are still grappling with the upcoming Minimum Energy Efficiency Standards, and our new assessment with Eco Approach gives landlords clear insight into what is needed to meet their obligations.
“By having the free property assessments with Eco Approach, along with The Mortgage Works’ discounted Energy Efficiency Further Advance products, we aim to remove the uncertainty and some of the cost barriers. Improving energy efficiency isn’t just about meeting future standards, it can also enhance property values, boost rental yields and create more comfortable homes with lower energy bills for tenants. We’re committed to helping our landlord customers act now so they’re better prepared for the changes ahead.”
Lee Rix, Managing Director of Eco Approach, said: “We are proud to be working with The Mortgage Works on this important initiative, helping landlords understand the improvements needed across their properties and giving them a clear, practical route to action. Combining discounted lending products with Eco Approach’s retrofit expertise means landlords can rest assured that high-quality installations, underwritten by insurance-backed guarantees, will assure compliance with the new legislation.
Our resident-first approach is designed to make the journey smooth and informed for landlords and tenants alike, supporting better property performance and homes that are warmer, healthier and more affordable to run.”
David Hollingworth, associate director at L&C Mortgages, said: “The clock is ticking for landlords to improve the energy efficiency of their properties and the sooner that they start to think about the necessary steps, the easier it should be to manage the work and expenditure. Although many landlords will realise that they will need to take action, it can be hard to know where to start.
“It’s therefore important to be able to pinpoint a practical plan to work towards the necessary standards. Being able to evaluate and understand the size and cost of the job, followed by tailored advice on the options to fund improvements should help avoid a last-minute panic as deadlines approach.”
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