Paragon Bank has launched a range of 80 per cent loan to value buy to let mortgages specifically for properties with an energy performance rating of A to C.
The new range aims to encourage landlords to invest in energy efficient properties and increase the proportion of A to C rated properties in the private rented sector.
The number of BTL properties with an energy rating of between A and C has increased by 272 per cent over the past decade to 1.8m but approximately six out of 10 homes in the sector are still at grades D or below according to government figures.
The five-year fixed rates from Paragon start from 3.99 per cent for purchase and remortgage and include free valuations, no product fees and £350 cashback. They are available for portfolio landlords on single self-contained properties and HMO.
Richard Rowntree, Paragon Bank Managing Director of Mortgages, says: “Landlords have made great strides in adding more energy efficient homes to the PRS - or upgrading properties to C or above standard - over the past decade. However, more needs to be done as the Government moves towards its net zero carbon target by 2050 and landlords have a key role to play in that.”
Under Government proposals, homes in the private rental sector will need a minimum EPC rating of C for new tenancies by 2025 and all homes in the sector will require this rating by 2028.
Rowntree concludes: “If landlords are to improve the energy efficiency of PRS stock, they need the finance to enable them to do so. Making sure there are attractive options to add new stock, whilst recognising the efforts to upgrade existing properties, is an important element of this.”
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The cost of upgrading a property from E to C will not be covered by any saving from a mortgage like this, it just means an extra product is available to some LLs. If you ask me its just a gimmick - and all my mortgages have a significantly better rate than 3.99% (although they are also all less than 80% LTV).
If the E to C costs me then I have no choice but to increase the rent.
Simple business and economics.
We are all going to have extra costs so we will all be increasing our rents, it's not as if some landlords will be undercutting others , it's like when one fuel station increases the price of diesel the rest follow.
So now we have mortgage lenders promoting energy efficient mortgages just as the government scraps the GHG - not really joined up is it :)
One loony scheme replacing another! No thank you to either.
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