BTL sustainability investment - avoid fines and increase rental income

By Sam Covington | Monday 25th April 2022 | 1 minute read

The appetite for buy-to-let investment is on the rise. Between January and March, 1 in 10 properties sold in Great Britain was a BTL investment. During this period, BTL landlords bought 42,980 homes, approx. £8.5bn worth of property, the latest figures show. 

The Minimum Energy Performance of Buildings Bill is currently in the House of Commons and if passed, would make it law that "all new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025" with existing properties requiring Band C is met by 2028. Landlords and investors need to know that there could be fines of up to £30,000 if a property does not comply.

Whilst it's possible the Bill may not pass, with the rise in energy prices, efficiency is going to weigh heavily on the minds of landlords and renters. Currently, it's estimated that 12.6 million properties (58% of homes) across the UK have an EPC rating of D or lower (A is the best, G is the worst). Therefore, nationwide investment will need to be carried out.

Property refurbishment can not only ensure a property meets energy performance standards to avoid a significant fine, but it can also increase rental income opportunities with 18% of renters saying they would pay more rent if refurbishments such as new windows were installed.

Alternatively, investing in a new-build BTL may be the easiest way to ensure the property achieves the target EPC rating of C or above. 

It's estimated that energy-efficient homes are worth up to an average of £40,000 more than lower-rated properties, so what should landlords or investors be focusing on?



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