Buy-to-let landlords are increasingly prioritising energy-efficient homes as they prepare for upcoming changes to energy performance regulations set to take effect in 2030. Paragon Bank has reported a significant rise in lending for properties with Energy Performance Certificate (EPC) ratings of A-C, reflecting a broader trend among landlords to enhance their portfolios with more sustainable options.
What are the upcoming EPC changes?
New regulations will require rental properties in the UK to meet minimum energy efficiency standards by October 2030. This means that properties must have an EPC rating of at least ‘C’ to be legally rented out. As a result, landlords are beginning to invest in energy-efficient upgrades to comply with these forthcoming requirements.
How is lending changing for landlords?
Paragon Bank’s recent financial results indicate a growing trend among buy-to-let landlords towards energy-efficient properties. Lending for EPC A-C rated homes has increased compared to the same period in the previous year. Energy-efficient properties now account for a significant portion of Paragon’s buy-to-let lending, reflecting a shift in landlord priorities.
What does this mean for landlords?
For landlords, this shift towards energy-efficient properties is not just about compliance; it also represents a strategic move to enhance the value and appeal of their rental offerings. As tenant demand for sustainable living spaces rises, landlords who invest in energy-efficient upgrades may find themselves better positioned in the market. Additionally, properties with higher EPC ratings could attract more tenants and potentially command higher rents.
What is the current performance of buy-to-let lending?
Paragon Bank’s overall mortgage loan book has grown, supported by new buy-to-let lending. The bank’s new business pipeline reflects an increase year-on-year. Notably, the credit performance of Paragon’s buy-to-let assets remains strong, with arrears lower than the sector average.
Frequently asked questions
What should landlords do to prepare for the 2030 EPC regulations?
Landlords should assess their properties’ current EPC ratings and consider making necessary upgrades to improve energy efficiency. This may involve investing in insulation, energy-efficient heating systems, and other sustainable features.
How can landlords benefit from energy-efficient properties?
Energy-efficient properties can attract more tenants, potentially leading to higher rental income. Additionally, they may reduce long-term maintenance costs and enhance the property’s market value.