Landlords could be missing out on lower green mortgage rates by not undertaking new EPC assessments following energy efficient upgrades to their properties, Paragon Bank research has revealed.
Paragon Bank’s survey of over 500 landlords revealed that almost six in 10 (57%) landlords who have undertaken energy efficiency upgrades to their properties haven’t commissioned new EPC assessments after the work is complete.
This means that a significant proportion could miss out on the preferential pricing on offer when mortgaging properties with EPC ratings of A-C.
The research, undertaken for Paragon’s Improving standards and sustainability in PRS properties report, also found that over a quarter (28%) had their properties reassessed after making energy efficiency upgrades, improving their EPC ratings. A lower proportion, 14%, found that their properties’ EPC rating stayed the same.
Separate research, undertaken on behalf of Paragon by Pegasus Insight, shows that six in 10 landlords own a property with an EPC rating of ‘D’ and a quarter have a property rated E, F or G.
The survey of nearly 900 landlords revealed that just under half (48%) of the average landlord’s portfolio does not meet EPC of ‘C’ or above, the new standard proposed as part of a recent Government consultation on private rented sector (PRS) minimum energy efficiency standards.
TIME TO REASSESS PORTFOLIOS
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said: “We were one of the first lenders to launch green mortgages, offering lower rates for properties with EPC ratings of A-C, incentivising landlords to purchase homes with better energy efficiency.
“These rates are also available on remortgages so we’d encourage landlords to reassess their properties following any energy focused upgrades because they could be eligible to take advantage of lower pricing.”
UNREALISTIC TARGET
And she added: “This research aligns with Government data highlighting how millions of properties will need to be upgraded to meet the proposed new minimum energy efficiency standards.
“As a result, we believe the 2030 target for all rental properties is unrealistic and could exacerbate the undersupply of homes for tenants. We’ve responded to the Improving the energy performance of privately rented homes consultation, calling on Government to abandon its 2030 target and instead adopt a phased implementation between 2030 and 2035.”
