The Intermediary – September 2025 - Flipbook - Page 13
BUY-TO-LET
In focus
improvements, and where they secure that money
from, especially when margins are already tight.”
KEY FACTS
Dan Clinton, head of BTL at The Mortgage
Works, adds: “Improving the energy efficiency
of private rented homes is important, and
there can be long-term gain for landlords
through increased property value and improved
rental yields.
“However, there are significant logistical
and financial challenges when it comes to
upgrading properties, which is why we are
seeing low demand for green mortgage products
amongst landlords.
“It’s important for the Government to provide
landlords with clear guidance, adequate support
and sufficient time to make their properties
greener. Once the market has that clarity, we
expect demand and activity to ramp up.”
Improving standards and
sustainability in PRS properties
– Paragon
◆ 44% of landlords prefer to purchase
properties in need of improvement.
◆ When improving energy efficiency,
49% cited a desire to increase rental
yields, with 41% looking to increase
the capital value of their investments.
Tenant-led change
In light of this ongoing uncertainty, sitting tight
might seem like the sensible option. However, it
could leave landlords with only a small window
of opportunity if the regulations confirm that
EPC requirements will need to be implemented
by 2028. With labour and supply shortages on
top, waiting may well cause a serious backlog
that results in many being unable to complete
the necessary changes in time. But beyond just
meeting regulatory requirements, there are
◆ In 2013, 23% of PRS properties had an
EPC of A to C. By 2023, this had more
than doubled to 48%.
◆ 83% of landlords have at least one
property that meets the MEES
proposed by Government.
plenty of reasons for landlords to be looking
towards green buy-to-let and energy efficient
property as forming the future of their portfolios.
One of the most fundamental reasons, of
course, is tenant demand, as both the cost of
living and sustainability awareness grow.This also
goes beyond energy efficiency within the home,
and branches out into other environmentallyfriendly elements, such as providing the capacity
for electric vehicle (EV) charging.
“Tenant demand has always been strong for
warmer, cheaper-to-run homes,” says Norris. But
he questions whether tenants are motivated by
environmental concerns or lower bills.
“Lots of landlords are deeply committed
to ensuring their properties are as efficient
as possible, but it is certainly the case that
regulation has driven the adoption of specific
measures and imposed particular timetables over
recent years,” he adds.
Even when there is demand from tenants, the
investment must still make financial sense.
“In some areas, for example, there is growing
demand for EV-ready parking and charging,
which landlords have been keen to capitalise on
where possible,” Norris says.
“The difficulty, as always, is how to fund these
kinds of retrofits or installations
p
Private rented sector report
summer 2025 – The Mortgage
Works
◆ 62% of landlords are unaware that an
EPC is a legal requirement.
◆ 67% of landlords are unaware that the
Government’s proposed minimum
energy efficiency rating is EPC
Band C.
◆ 73% of landlords do not know the
proposed start dates for the new
minimum energy efficiency ratings to
come into force.
◆ 39% of landlords are mindful of
the impact that energy efficiency
improvements will have on tenants.
