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Low EPC rating and BTL lending


Grampa

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Just encountered a EPC  problem with a BTL property I am purchasing.

Now we are all aware you cant rent out a property with a EPC rating below a E. But having just had a offer accepted on a BTL property and a BTL mortgage agreed in principle I was surprised to just be told  the lender TMW will now not lend on it because the EPC rating is a F/G.

The rating is this because it hasn't got any heating, but I plan to renovate with new combi boiler and rads etc, which I know will bring it up to a E/D. 

The lender will release funds if the works (to bring up EPC rating)  are under 5k and put a retention of 5k for 3 months on the mortgage. If over 5k NO MORTGAGE GRANTED

But the lenders valuer who didn't even visit the property says it needs 21k of works to bring it up to a E rating and he comes by that figure by totaling the all the suggested works on the original EPC such as under floor heating, internal & external wall insulation and solar panels. There wasn't even a option for boiler even though the property doesn't have one.

So it looks like I have to get another report from a EPC assessor to state if I instal a combi boiler, loft insulation and LED lighting and provide quotes totaling under 5k I can request the decision is overturned.

So anyone trying to sell a property with a low EPC rating they will struggle to sell to the rental market unless the purchaser is a cash buyer.

 

 

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That s interesting but not surprising. I know lenders have become increasingly nervous. The country is in a dire economic state and so their nervousness will, in my opinion, only increase. 

There are other (more expensive) ways to finance property purchases in the short term. After the work is completed the property can then be refinanced with a mortgage. 

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1 hour ago, Richlist said:

That s interesting but not surprising. I know lenders have become increasingly nervous. The country is in a dire economic state and so their nervousness will, in my opinion, only increase. 

There are other (more expensive) ways to finance property purchases in the short term. After the work is completed the property can then be refinanced with a mortgage. 

I did look into that but I'm not prepared to pay the extra cost and apparently you cant remortgage for 6 months after purchase anyway so those extra fees/interest will be quite substantial.

There certainly appears on the face of it a agenda to make it harder to be a Landlord. But we have all known this for a few years and the writing has been on the wall. 

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  • 2 years later...

Now the economic state is even worse than it was, and I am not sure I want to take a loan anymore. I will most probably have to rent until I’m forty or something.  Our generation must work much more to get the same payment as our parents. We cannot afford to buy a house or have a big family anymore. We need to live up to the means and always talk to someone like Mortgage Broker Sunderland to make correct financial decisions and not make mistakes that will not be forgiven. I, for example, do not have parents that would be able to pay for my education in college or buy me an apartment, and I have to manage everything myself. 

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When I was in my twenties, married with 2 kids and 1 income.....mortgage interest was 8-11% . We worked hard, went without holidays and any luxeries, paid the mortgage and inflation did the rest. Buying property, making 300% profit and buying bigger and better got me to where I am today.

The old saying.....no pain no gain....is so true. I have friends who took your approach and are poor, struggling & still renting.

It's your choice.

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I'm with RL, although in the early 90's we were struggling with what many thought was a crazy high mortgage, at 16% (for a short while). I paid for courses to be become able to work offshore, hated it, but it paid for the mortgage, and later enabled me to go for BTL's.

Bl**dy offshore.

You gotta live somewhere, you gotta pay to live somewhere. Property prices might crash and so buying later is better, but they might continue to rise. Interest rates will rise further, but how far?

The gamble is your choice. How many years till you're 40, how much of the mortgage would be paid off by then?

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4 hours ago, Rohitstad said:

Now the economic state is even worse than it was, and I am not sure I want to take a loan anymore. I will most probably have to rent until I’m forty or something.

If you are still renting at 40 then you will probably be renting for life.

It never was easy buying a house and like others on here I bought way back in 1971 and it was as financially difficult back then as it is probably now but you just went without things. Inflation will, over the years, win through.

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