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Landlords are clearly very resilient and adaptable, as our latest sales figures on New Build Buy to Let applications show.
Now over the years, there has been attempts to knock landlords down. But each time they get up again. Nothing, it seems, is ever going to keep them down.
Ever since the dawn of the buy to let market, there has been talk of a landlord exodus from the market. Landlords got through the financial crisis and have adapted to recent PRA changes, with a surge in limited company buy to lets.
Now with energy efficiency on the political agenda – and rightly so – landlords are continuing to adapt.
Since April 2020, landlords must comply with Minimum Energy Efficiency Standards (MEES) and have an energy efficiency rating of E or above, unless they have a valid exemption in place. More recently, the Minimum Energy Performance of Buildings (No.2) Bill is being passed through Parliament. If implemented, this will require landlords to upgrade their properties further to have an Energy Performance Certificate (EPC) rating of C or above by 2025.
Landlords Adapt To New Builds
Energy efficiency is vital and as a result landlords are adapting accordingly – with new build properties becoming more appealing. This is something Vida has seen at first hand. In the first quarter of 2022, we have seen a whopping 700% increase in new build buy to let applications, compared to the same period of last year.
This can’t all be down to Vida’s generous buy to let criteria and we think it is landlords demonstrating their chameleon tendencies again, adapting to a changing market and adding new build properties to their portfolios
New Builds Are More Energy Efficient
The Office of National Statistics (ONS) show the differences in EPC ratings of new and existing homes across England and Wales. It reports the median score for new dwellings were equivalent to band B compared with existing dwellings which were equivalent to band D.*
As you would expect, new builds are more energy efficient because that is embedded at the point of construction. Therefore, acquiring new builds will be more appealing to more landlords now, because they will already have to bring existing properties up to the same energy standard. This will be disruptive and costly, so new build is a good way for landlords to extend their portfolios right now without adding to that burden.
Naturally, a landlord would not choose a new build simply for that reason, as the property must still be marketable, but it will be part of the considerations now no doubt. With more landlords looking at new builds, we thought we would quickly take the opportunity to share some of Vida’s criteria:
- Up to 85% LTV on both new build houses and flats
- Offers are valid for six months
- Builder deposits acceptable (up to 5%)
- Unlimited portfolio size
- Generous payrates:
- 5 year fixed rate at pay rate
- 125% for basic rate taxpayers or SPVs
- 140% for higher rate taxpayers
*Source - Energy efficiency of housing in England and Wales - Office for National Statistics (ons.gov.uk)