A poll conducted by Nationwide showed that roughly a third of landlords are either only somewhat aware or entirely unaware of the changes at all – and Stevens said one of the biggest challenges facing brokers was shifting that mindset, adding :
“A big job for us is educating people. More people know the EPC rating of their fridge than their house – we need to help change that.”
Of those who are aware, the biggest challenges in meeting the new requirements were: constraints with the property itself (52%), levels of disruption (44%), limited payback on investment and (44%). Just over a quarter – 27% - say that lack of funds is the biggest challenge.
The changes have also had unintended consequences – namely, reduced supply to the PRS, landlords becoming trapped with their current lender due to being below the EPC threshold, and landlords with lower-rated properties becoming financially disadvantaged.
Stevens concluded: “Lots of [landlords] are not going to see an increase in their property value after retrofitting and are potentially going to push to the owner-occupier market on the basis that regulations there are 10-15 years behind. We’re then going to see them shifting over and the number of private rental properties available decrease, and potentially see a shortage.”
“We also have the potential of mortgage prisoners, where landlords are trapped with their mortgage lender or on an undesirable rate as their property’s rating stops them getting a mortgage with another lender – a good example of this is the current G and F rated properties, where the same is happening.”
“One of the things we have fed back to the Government as part of their consultation on this is that the £10,000 cost cap is fine if you have a property in Kensington or Richmond, where this might not touch the surface – but if you’ve got a property in the North East, are you going to want to spend £10,000 on it? Probably not, and if you do you might wipe out several years of returns.”
