A property industry trade body chief says buy to let is “virtually pointless” for landlords with substantial mortgages who seek income from rent.
The situation is worsening because of proposed energy efficiency changes, says the National Association of Property Buyers.
“The proposed upgrade to EPC legislation is the latest in a long line of disadvantages of owning a Buy To Let. To make properties cheaper to keep warm, and to help the country meet its green targets, landlords will soon have to spend up to £10,000” warns NAPB spokesperson Jonathan Rolande.
From 2025, under the current proposals all newly rented properties will be required to have an EPC rating of C or above. Currently, properties only require an EPC rating of E or above. Existing tenancies will have until 2028 to comply with the new rule changes.
“Whilst landlords of expensive properties in places like London or Manchester can take this in their stride, the thought of spending £10,000 on a home worth £80,000 will be a catalyst to see yet more landlords flee the sector.
“If these homes sell to owner occupiers, there will be increased scarcity of homes to rent, potentially forcing up prices yet again. Many landlords are already getting out and I suspect more will follow.”
He continues: “At the moment if a landlord has a sizable mortgage, owning BTL for the rental income is virtually pointless. Months or even years of profit can disappear in one go if there’s a costly boiler issue or the managing agent of the block decides a new lift is required.”
Rolande says that while awareness is beginning to grow around these proposals, there is still much consideration that needs to be given to the actual impact that these changes will have on landlords and property owners.
He warns that there is “a real concern” that a substantial amount of properties risk potentially being declared ‘unrentable’ and subsequently ‘unsellable’ or ‘unmortgageable’ due to landlords being unsure about what the changes will mean for current and prospective tenancies.
