Side effect of EPC changes
The buy-to-let sector is witnessing some turbulent times, with property investors having to acclimatize to a number of detrimental changes. One of the newest is meeting MEES (Minimum Energy Efficiency Standards), with a number of rental properties already being taken out of circulation because they do not meet new energy standards (new tenancies and those renewing must legally have an EPC rating of E and above).
MEES have landed at the same time as restrictions on mortgage interest tax relief, a 3% stamp duty surcharge on additional property purchasesand the looming tenant fee ban, which may result in letting agents recouping costs by increasing management fees charged to landlords.
While the knee jerk reaction may be to cash in and sell up, now could be the time for landlords to ride out the lettings storm to their advantage. MEES are already forcing some landlords to take their properties off the market while they make improvements, while some landlords will feel the EPC requirement is the final straw and exit buy-to-let altogether. The impact is tangible, with research conducted by Capital Economics for the National Landlords Association revealing 20% of landlords are planning on selling over the next year - a 10-year high.
It’s clear tenants could be facing a lower supply of rental properties during a climate of rising demand. Estate agent Knight Frank issued a report in 2017 that highlighted almost one in four households in Britain will be renting privately by the end of 2021, with a year-on-year rise in tenant numbers.
A smaller pool of rental properties and a growing band of tenants means there may be opportunities to adjust rents to meet demand. Rent rises have been described as ‘subdued’ - suggesting there is room for manoeuvre- which will go some way to boosting the viability of buy-to-let. In fact, rent rises in London grew by a miniscule 0.1% in the last 12 months to February 2018, and by 1.1% across Great Britain, according to the Office for National Statistics.
Landlords should also seek out smart business practices that help preserve their income streams. Anything that saves time and hassle always translates to cost savings in the end. Viewber is finding more landlords are coming to us directly to utilize our viewings and inspection service in the search to increase yield and preserve income.
Assigning one of our professional Viewbers to undertaking viewings is ultra efficient, especially for landlords who live miles from their let and would otherwise incur travel costs, as well as unwelcome disruption to their day.
Our Viewbers can also undertake preliminary property inspections for buy-to-let investors looking to shortlist potential new purchases. Our Viewbers file objective reports that help investors with the decision making process, negating the need for the investor to travel themselves. This service is especially beneficial for investors who are looking to take advantage of exceptional yields and value appreciation prospects in locations some distance from their base.
If you’d like information about our services contact Viewber today.