Many landlords who do not want to commit to high levels of expenditure to improve the energy efficiency of their homes, may soon be putting their properties up for sale.
That’s the belief of Gavin Perrett, director at Hawkhurst Invest, a property investment consultancy based in Essex.
The Westminster government has yet to respond to a consultation it held in 2020 on how to boost rental sector energy efficiency, but a draft strategy includes a ‘preferred policy scenario’ for new tenancies to have an EPC rating of C or above by 2025, extending to all tenancies by 2028.
Perrett says some landlords including accidental landlords, people with property investments who are reaching retirement age, and small landlords may simply not be prepared to take on the additional investment to bring their property portfolio up to standard.
“Those landlords are likely to put their properties on the market for a quick sale. Property sales are currently completing in around 150 days, which is quick, so they may choose to sell up now to extract their equity rather than commit to the long term” he says.
And he adds that with rental units coming onto the market for quick sales, investors could secure new properties quickly, and even at lower than market rates to secure quick sales for vendors.
“For renters there is a benefit too as the quality of properties will improve over the long term. With improved energy efficiency and lower running costs, which at a time when inflation, interest rates, and the cost of living are rising quickly, having an energy efficient home is a clear benefit” adds Perrett.
He continues: “As property standards are improved landlords are likely to be able to command higher rent and therefore a higher rental yield. Some landlords will lose out as they decide to sell, possible below market value, and for tenants they could be paying higher rents, but for properties that have been upgraded to a higher standard."
He concludes by reminding landlords that listed buildings have some flexibility. Owners of these will have to consult their local planning departments. There may be exceptions if improvements to properties change the fabric or appearance of the property
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