As a landlord, you’re no stranger to change. You have a lot of responsibility on your shoulders to begin with, beside the constant regulatory changes thrown at you from left, right and centre. Over the last few years, you’ve been the subject of various adjustments. In the last decade, you’ve lost tax relief, suffered stamp duty surcharges, and felt the effect of capital gains tax increases gradually chipping away at your profit. There’s another change on the horizon and depending on the property you own; it might mean another expense is incoming too.
What’s the change? And how can you deal with it? Let’s find out.
Change is Coming
If you’ve seen a piece of card with a horizontal multicoloured bar chart, you’ve seen an EPC, or Energy Performance Certificate. These are more than colourful charts to keep in the folder of documents on top of the boiler – EPC ratings are becoming more and more important in the property market as time goes by and regulations are changed to tackle the issues of climate change. Furthermore, in the cost of living crisis that is currently escalating, it’s a good idea to take a look at EPC ratings to see if there any ways to improve efficiency and lower your bills. However, as a landlord, there is a greater sense of urgency.
In just three short years, landlords will be unable to rent out their properties to any new renters if the EPC rating is lower than C. 25 per cent of landlords admit that their properties are rated D or below, meaning they will be unrentable by 2025. You need to start implementing plans and changes now in order to prepare for the upcoming adjustments.
What is it Going to Cost You?
As with most things these days, change comes with a price. The expected costs of gaining a sufficient rating are looking to reach around £10,000 which will undoubtedly prove to become a major challenge. As the construction industry struggles after the pandemic and supply chain delays, the cost of labour and materials is on the up. To deal with this, it’s likely that the costs of upgrading your property to improve efficiency will go up too. Extra costs are expected as tenants will need to move out of the property while it is renovated, resulting in a significant loss of rental income. After the challenges of the last few years, it’s going to be coming at a time when you could do without the stress and expense.
How to Deal with the Costs
There is help available to help you navigate the changes and deal with the expense. There is a multitude of information to help you understand the legalities. You can also find multiple ways of funding the necessary changes. By using a specialist property finance comparison site like Propp, you can compare the costs of various funding options. Look into these options now before the costs are driven up as we edge ever closer to the deadline. You might be able to find a second charge bridging load or a refurbishment bridge. These financial options are great for landlords as they need short-term funding without the commitment involved in tying themselves into a long-term financial agreement.
To protect your property and your tenants, now is the time to start making changes. Begin by finding out your EPC rating, what you need to improve it, and go from there. With the right resources, you will have the tools you need to navigate these stormy waters and come out the other side stronger and prepared for the future.