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Grampa

Low EPC rating and BTL lending

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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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