Coventry Building Society has confirmed that it will not be lending on buy-to-let properties with an EPC rating that falls below an E rating – with other lenders expected to follow suit.

Only properties with a valid exemption will be eligible for a mortgage if they are rated F or G, with the new rules to be implemented this Thursday (March 15).

The building society said it will be updating its lending policy to reflect this.

The requirement to comply with Minimum Energy Efficiency Standards is linked to EPC rating and will come into force from April.

From that date on, any new letting or renewal must have a minimum E rating under an EPC, a requirement that will be extended to existing lets from April 1, 2020.

Doug Hall of RLA mortgage partner 3mc said: “Lenders need proof a property is suitable security to lend against.

“Once the rules have changed on April 1 properties are not going to be considered suitable security unless they have an EPC rating of E or above, or have a valid exemption.

“The new rules could lead to further confusion when it comes to portfolio landlords and how that is interpreted if they have a mixture of properties some of which meet the new standards and some of which don’t.

“This is particularly pertinent now that new lending rules for these landlords mean that their whole portfolio needs to be taken into account before a decision can be made on whether to lend on any new properties.”

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