15th
Feb 2023
A property industry trade body chief says buy to let is “virtually pointless” for many landlords suffering from increased substantial mortgages and whose rental income is also being drained of profit by government intended regulations, tax changes and councils’ licensing schemes.
The National Association of Property Buyers says the government’s proposed energy efficiency ‘improvements’ further exacerbates the worsening situation.
Jonathan Rolande warns. “The proposed upgrade to EPC legislation is the latest in a long line of disadvantages of owning a Buy To Let. To make properties cheaper to keep warm, and to help the country meet its green targets, landlords will soon have to spend up to £10,000.”
Currently PRS properties are only required to have an EPC rating of E or above, however from 2025 all rented properties will have to have a rating of C or above, existing tenancy properties will have until 2028 to achieve the rating.
He continues: “Whilst landlords of expensive properties in places like London or Manchester can take this in their stride, the thought of spending £10,000 on a home worth £80,000 will be a catalyst to see yet more landlords flee the sector.
“If these homes sell to owner occupiers, there will be increased scarcity of homes to rent, potentially forcing up prices yet again. Many landlords are already getting out and I suspect more will follow.”
Jonathon adds: “At the moment if a landlord has a sizable mortgage, owning BTL for the rental income is virtually pointless. Months or even years of profit can disappear in one go if there’s a costly boiler issue or the managing agent of the block decides a new lift is required.”
He says there will be major issues for some landlords as some properties could be declared as ‘unrentable’ and if so could become unsellable’ or ‘unmortgageable’, as landlords are uncertain about whether the changes will affect their current and/or future tenancies.
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