It’s a sad consequence of the economic downturn that fewer people feel willing or able to save for a deposit and/or take their first step onto the property ladder.The domestic rental market is growing.
Couple that with the willingness of the Government to allow those with pensions savings to access their money more quickly, either to spend or re-invest it in other ways, and it’s no surprise that the buy-to-let market is also growing and likely to grow still further in due course.
However would-be landlord investors should be advised that it is not all plain sailing and that the industry contains many legal and regulatory traps for the unwary.This article addresses just one.
Energy efficiency is a key part of EU and UK energy policy.The Government published draft regulations in February to ensure that, by 2018 in England and Wales, all landlords achieve a certain level of energy efficiency in their properties.This will relate to both domestic and commercial properties.
The relevance and practical effect of all this is that the proposed changes will make it unlawful for landlords to let properties after 1st April 2018 with an EPC rating of F or G (the lowest two grades of energy efficiency). The Government estimates that approximately 20% of privately rented commercial properties and 10% of domestic properties are in bands F & G.It will be impossible to let properties which do not meet the minimum standards unless and until they have been upgraded.
Final details of the legislation are awaited, however the principal aims are clear and there will be significant implications for landlords, especially in terms of cost.Property valuations could also be affected, as too could rent reviews for those leases which contain them.(The same also goes for tenants wishing to assign or sublet their properties.)
Owners and occupiers should have a full understanding of their properties’ efficiency and begin to consider soon the likely costs and viability of carrying out refurbishments/upgrades to their properties or possibly thinking about selling them prior to 2018.That sounds like a long time away but, of course, with so many properties currently falling below the minimum levels, that could result in a lot of stock hitting the market in a short space of time.
If you would like to talk to us at Berwins, please contact any member of the Property team on 01423 509000.