29 August 2023

How bridging finance could help Landlords improve their EPC rating

By Liza Campion, Head of Corporate Accounts, Precise Mortgages

It’s anticipated that by 2028 all buy to let properties will be legally required to have an Energy Performance Certificate (EPC) rating of ‘C’ or above, financial penalties for those who fail to comply.

Are there many properties in need of energy efficiency refurbishment? Well, the average landlord has 3.5 properties rated ‘D’ or below and around one third of rental properties have an EPC rating below ‘C’. Although approximately six in 10 landlords have said they’d look to carry out works needed if their property didn’t meet the required EPC standard, the estimated costs for reaching EPC standard ‘C’ are now around £10,000 per property.[1]

Continued demand for bridging

Looking at the costs for carrying out the required EPC standard works, it’s evident why landlords have been turning to options such as bridging to fund their improvements.

The Association of Short Term Lenders (ASTL) reported that Bridging Mortgage loan books have grown in Q2 2023, increasing by more than 5% to an all-time high of just over £7.1bn. Which, especially in the face of an uncertain economy and a faltering property market, represents another very strong performance.[2]

Why choose bridging finance?

Bridging finance could offer landlords the speedy, short-term borrowing solutions they need to finance their property upgrades. It could help them to quickly make improvements, minimising the impact on their tenants.

The latest EY UK Bridging Market Survey found that ‘mortgage delays’ have increasingly been cited as a reason for borrowers to obtain loans with 39% of respondents ranking this option as one of their top two reasons for customer borrowing.[3]

And, ‘refurbishment’ has come out on top as the most popular reason why borrowers obtained a bridging loan, a trend which has been consistent over the last few years.

When choosing a bridging lender, 62% of their respondents considered ‘speed of execution’ as the most important factor. However, ‘reputation of the lender’ and ‘relationship management’ remained high priorities for customers making borrowing decisions. [4]

How Precise Mortgages could help

As one of the leading specialist lenders, we’re focused on delivering clear bridging solutions.

[1] Q2 2023 BVA BDRC Core Landlords Panel

[2] Bridging loan books continue to grow - ASTL (theastl.org)

[3] EY UK bridging market survey 2023 1.93mb pdf

[4] EY UK bridging market survey 2023 (page 15) 1.93mb pdf

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