A green future is here today: time for lenders to step up
There are many themes that will dominate the bridging market in 2022.
The market will continue to realign post-Covid, with buyer activity seemingly changing away from the Summer of 2020 assumption that increased working from home would drive an exodus from urban areas.
House purchases and sales will remain dependent on post-pandemic and economic realities - due to potential broader economic factors - will place a greater emphasis on development and refurbishment to retain as Buy-to-Let stock rather than expecting quick sales.
The major theme of the year will be the continued focus on the environment. As noise about the climate crisis grows, every sector is paying attention to what can be done.
In property and lending, there is a large role to play, which if done right can see investors, landlords, homeowners and renters all benefitting.
A looming deadline
By 2025, all new Buy-to-Let properties will need to have an EPC grade of C, while the rest of the stock will need to have reached this level by 2028.
Britain has a notoriously old housing stock, so this will be a challenge for investors and landlords to meet to upgrade the old homes, and place more emphasis on new homes meeting the highest po
For bridging investors as well looking to purchase, refurbish or achieve planning environmental concerns are of high priority for buyers.
Not just because of the climate crisis, but as we see already at the start of this year energy prices are set to go up a huge amount, making energy efficiency a crucial factor for buyers of new homes and the continued affordability of properties for renters.
Whatever else happens in the market in 2022, the challenges of meeting necessary environmental standards will be on everyone’s minds. Not just to pass them on to homeowners and renters, but to prevent owning stranded assets.
The lender role
Towards the back end of 2021, noise around environmentally minded mortgages became action, with lenders increasingly offering incentives or mortgages catered to green deals.
This is good, but the action needs to continue in 2022 so landlords and investors can see the full benefit.
Incentivising housing improvements through rates and offers will be key, and brokers taking advantage for their clients will see long-term gains, such as our EPiC and EPiC star ranges which incentivise landlords and bridging investors with lower rates for greener properties.
For new builds, lenders can incentivise high-quality housing which meet environmental needs by offering higher leverage, loan sizes and lower rates to make larger investments easier for developers.
The need for high-quality homes
For the last decade, the focus in the bridging and development property market has been trying to fill the high-quality housing gap this country has. Regenerating or creating new stock for a country falling short of its house building targets.
That need remains, and whatever broader economic factors may challenge the market it can continue strongly knowing there is a constant demand for homes, it's up to lenders and investors to provide the best quality ones possible.
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