EPC Timescale Mandate CHG

EPC Timescale Mandate Confidence Booster

The Q3 2023 BVA BDRC Landlord Panel research report for a specialist mortgage lender was the first held since the government’s decisions of delaying Section 21’s abolition because of much needed court reforms, and the stricter EPC timescale mandate will not be introduced for the foreseeable future.

According to the survey’s results 12 per cent of landlord respondents stated that because of the EPC timescale mandate U-turn they are now able and willing to stay in the PRS. This is following the continual increases in numbers of landlords quitting the sector as in Q3 it had fallen from Q2 figure of 37 per cent down to 28 per cent.

The figures also show that whilst eight per cent of BTL landlords intend to increase their portfolio in the next twelve months it is most likely that landlords with larger portfolios will purchase more properties as 18per cent of landlords, with 20 plus properties, stated they will be investing in more properties.

Around 71 per cent of landlords said they had seen an increase in tenant demand of 4 per cent since Q3 which is the highest ever –just three per cent reported a fall in tenant demand.

What with the PRS continual housing stock shortage and the ever rising tenant demand with rents increasing by an average of 5 per cent over the previous quarter and rental yields have also risen quarter on quarter to 5.3 per cent.

A spokesperson for the lender, says: “There are clearly a large number of factors for each individual landlord to take into account when looking at the performance of their own portfolio, and their optimism – or otherwise – for the future. However, it’s clearly good news to see a significant shift in positivity from landlords across a number of aspects, and to see confidence having risen quarter-on-quarter.

“Certainly, overall strong tenant demand is playing a major part here, as perhaps is the belief that mortgage rates may now have topped out, and that the market is finally shifting southwards, with more competitive rates meaning stronger affordability.

“The Government’s announcement on minimum EPC levels not moving up to C and above was perhaps a relief to many, particularly in the short-term, and for a number it may make the difference in terms of them staying invested in the sector.

“The number of landlords saying they plan to divest over the next 12 months has fallen, and this may partly be due to the retraction of the energy efficiency regulations for the PRS, but this should not detract from the need for rental properties to be as energy-efficient as possible, particularly in light of the increased utility bills all households have suffered in recent years.

“While it is too early to say whether we are seeing the start of a new trend line, there appear to be many more landlords feeling optimistic about their future within the PRS, and if this means landlords can keep much-needed housing supply available to tenants, then this can only be viewed as a positive.”

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