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UK buy to let property investors are facing a collective bill of £420 million to meet new energy standards that comply with the newly updated regulations.
New research from the UK Green Building Council has suggested that landlords face a collective bill of £420 million in order to comply with new energy standards. The data estimated that around 300,000 rental properties are currently operating far below the new minimum energy standards.
The UK Green Building Council has calculated that the average cost of raising an F or G energy rated property to the required minimum E standard works out at around £1,400.
However, according to experts, costs could quickly mount up for portfolio landlords with multiple properties.
Landlords with a selection of homes under their management and limited liquidity will need to work quickly in order to raise the finances needed to carry out sufficient energy improvements. It is essential that this is done in order for landlords to avoid the significant fines associated with flouting the new energy regulations.
Commercial chief executive officer at specialist lender Together, Marc Goldberg, spoke out about the research: ‘At a time when their profits are being seriously squeezed following a swathe of new tax and regulatory changes impacting the buy to let sector, landlords are feeling increasing pressure on their cashflow this year and can ill afford the potentially huge fines.’
He continued: ‘While the vast majority of landlords understand that enhancing the energy efficiency of their properties will boost rental yields over the long term, unfortunately many don’t have the available cash to hand to fund the urgent home improvements that are needed. Although the estimated cost of updating a single rental property isn’t too much of a stretch, the average UK landlord has around eight properties in their portfolio, a scale at which costs can very quickly spiral out of control.’