Three steps to helping Buy to Let clients improve their EPC ratings
November 2023
With the UK government scrapping the proposed legislation requiring landlords to meet a new minimum EPC rating of C, the industry has been left somewhat uncertain on next steps on sustainability. However the conversation around energy efficiency of UK homes is one that is only set to continue, especially given 26% of UK carbon emissions come from our homes.
Many landlords will still want to get ahead of potential new legislation, especially as the majority (71%) of them own rental properties with an EPC rating of D or below1. And brokers can play a key role in advising their Buy to Let (BTL) clients on the types of energy efficient home improvements they could consider to substantially, yet cost-effectively, improve their EPC ratings.
Step one: starting the conversation
Traditionally, sustainability and energy efficiency have not formed a large part of the mortgage conversation between brokers with landlords. However, there is a growing emphasis on the housing market’s impact on carbon emissions, and with tenants also looking for ways to save money on their energy bills, brokers are in an excellent position to speak to landlords on how they can make their properties more energy efficient.
As brokers are often the ‘face’ of mortgage and financial conversations, they can help landlords to understand how to improve the energy efficiency of their properties and recognise which upgrades will be most effective at improving the EPC ratings of their rental homes and therefore making them more attractive to prospective tenants. By doing so, brokers can add value to conversations with clients, whilst playing a pivotal role in helping to improve sustainability standards of homes, which will be more appealing to future tenants.
Step two: creating a sustainable action plan
Creating a strong plan on how to make sustainable improvements is the next step. Brokers can help BTL clients obtain information on their home’s EPC rating by introducing them to useful tools, including our Home Energy Efficiency Tool (HEET).
This creates an action plan to help clients understand the current and potential EPC ratings of their properties, detailing each property’s carbon emissions and suggesting potential eco-friendly improvements, such as energy efficient wall insulation or solar panels.
The tool takes into account desired budgets and which improvements will be most effective for a client’s property. For example, for landlords with a smaller budget, fitting a hot water cylinder jacket will cost around £18 and could save tenants around £50 per year in heating costs.2 Landlords with bigger budgets might want to consider more significant changes, such as installing cavity wall insulation. While this could set them back £2,700 for a semi-detached house, it could result in a reduction of 650kg of carbon dioxide emissions each year, helping them to save up to £265 on energy bills per year. 3
Step three: identifying funding options
The next step will be helping landlords to get the funding they need to make some of these energy efficient upgrades. Again, it’s here that brokers can help by discussing the types of green mortgage products available, and help landlords decide which product is right for them.
Our Green Further Advance, for example, rewards clients who retrofit their property with eco-friendly features, offering a lower interest rate if they put at least 50% of their borrowing towards energy-efficiency improvements.
Though it’s unclear when any potential future EPC legislation may affect landlords, brokers can provide vital advice now and help their landlord clients prepare early. By helping them to create an action plan and secure funding for sustainable improvements, brokers will give their clients the confidence they need to get started on making their property more environmentally friendly.
For more information on how to help BTL landlords boost the energy efficiency of their properties, visit our Home Energy Efficiency Tool page here.
2 https://energysavingtrust.org.uk/energy-at-home/reducing-home-heat-loss/
3 https://energysavingtrust.org.uk/advice/cavity-wall-insulation/
