The Mortgage Works has launched a support package designed to help landlords improve energy efficiency ahead of proposed minimum energy performance standards due to come into force by 2030.
The buy-to-let lender, part of Nationwide, is piloting free property assessments for landlords while also introducing discounted further advance products to help fund improvement works.
The initiative comes as research commissioned by The Mortgage Works highlights a lack of awareness among landlords about upcoming energy efficiency requirements.
According to the lender's findings, 67% of landlords are unaware that rental properties are expected to require a minimum EPC rating of C. Meanwhile, 73% do not know when the regulations are due to take effect in England and Wales, despite the proposed implementation date being just over four years away.
Landlord energy efficiency support expands
As part of the pilot programme, The Mortgage Works will fund 1,000 property assessments for eligible landlords in partnership with retrofit specialist Eco Approach.
The assessments will:
- Show how far properties are from achieving an EPC C rating.
- Provide tailored recommendations and estimated improvement costs.
- Help landlords understand available exemptions and exceptions.
- Highlight any grants that may be available.
- Provide support with carrying out recommended works.
The lender said the pilot will help assess landlord demand and engagement before considering a wider rollout to all customers.
Research suggests many landlords would welcome additional support. More than half (55%) said they would value help identifying the most cost-effective improvements, while 50% said guidance on financing upgrades would be beneficial.
Alongside the assessment programme, The Mortgage Works has introduced two new Energy Efficiency Further Advance products aimed at helping landlords fund required improvements.
The two-year and five-year fixed-rate products are both priced at 2.99%, around 2% lower than the lender's standard further advance rates. The products are available up to 75% loan-to-value and can be accessed by existing buy-to-let, buy-to-let large portfolio and limited company buy-to-let customers.
The lender believes the products could help address one of the main barriers facing landlords. Research from the National Residential Landlords Association found that 42% of landlords view costs as a very or extremely significant obstacle to making energy efficiency improvements.
Uncertainty around costs also remains widespread. The Mortgage Works found that 63% of landlords are unsure how much it will cost to bring properties up to an EPC C rating.
However, 21% estimate they would need to spend an average of £6,632, depending on the property's current condition and value. The lender said this level of expenditure would typically fall within the borrowing available through the new further advance products.
The Mortgage Works' latest buy-to-let report also points to potential financial benefits for landlords investing in energy efficiency improvements.
According to the report, properties with EPC ratings of A or B achieve a 12.2% price premium compared with similar D-rated homes, while properties rated C attract a 3.7% uplift.
Rental performance also improves. A or B-rated properties command an 8.1% rental premium, equivalent to around £85 per month based on average rents of £1,075. C-rated homes achieve an average rental uplift of 1.8%, or around £20 per month.
“We know many landlords are still grappling with the upcoming Minimum Energy Efficiency Standards, and our new assessment with Eco Approach gives landlords clear insight into what is needed to meet their obligations," said Dan Clinton, head of buy-to-let at The Mortgage Works.
“By having the free property assessments with Eco Approach, along with The Mortgage Works’ discounted Energy Efficiency Further Advance products, we aim to remove the uncertainty and some of the cost barriers. Improving energy efficiency isn’t just about meeting future standards, it can also enhance property values, boost rental yields and create more comfortable homes with lower energy bills for tenants. We’re committed to helping our landlord customers act now so they’re better prepared for the changes ahead.”
“We are proud to be working with The Mortgage Works on this important initiative, helping landlords understand the improvements needed across their properties and giving them a clear, practical route to action," said Lee Rix, managing director of Eco Approach.
"Combining discounted lending products with Eco Approach's retrofit expertise means landlords can rest assured that high-quality installations, underwritten by insurance-backed guarantees, will assure compliance with the new legislation.
“Our resident-first approach is designed to make the journey smooth and informed for landlords and tenants alike, supporting better property performance and homes that are warmer, healthier and more affordable to run.”
Industry figures said early preparation will be essential as the proposed deadlines approach.
“The clock is ticking for landlords to improve the energy efficiency of their properties and the sooner that they start to think about the necessary steps, the easier it should be to manage the work and expenditure," said David Hollingworth, associate director at L&C Mortgages. "Although many landlords will realise that they will need to take action, it can be hard to know where to start.
“It’s therefore important to be able to pinpoint a practical plan to work towards the necessary standards. Being able to evaluate and understand the size and cost of the job, followed by tailored advice on the options to fund improvements should help avoid a last-minute panic as deadlines approach.”
