OSB Group is launching a package of targeted measures to support buy-to-let landlords seeking to improve the sustainability of their investment properties.
The Landlord Leaders report, commissioned by the intermediary-only lender, which comprises Precise Mortgages, Kent Reliance for Intermediaries and InterBay, revealed that 44% of brokers believe the biggest challenge facing their landlord clients today is complying with new environmental requirements, while landlords themselves cited this as their second biggest concern, after tenant affordability due to the rising cost of living.
The research found that professional landlords, who derive their main income from lettings, were more likely to already be upgrading their property portfolios to make them more environmentally-friendly, and are far more positive about the future of the buy-to-let sector than their part-time counterparts.
It also discovered that both brokers and landlords were looking to lenders to offer more than the green financing currently on the market to fund property improvements.
In light of the findings, OSB Group is launching a new Landlord Leader Fund to support OSB Group’s existing landlords in transitioning their properties to an EPC rating of C or above in 2023.
The fund makes an initial £50m of ear-marked lending available at subsidised mortgage rates, covering both new loans with refurbishment needs and standalone refurbishment projects (subject to criteria).
It will also launch a new product range in 2023, delivered through the Landlord Leader Fund, with accommodating LTVs and ICRs during refurbishment, to improve the property value and appeal to tenants.
Additionally, enhancements to products and processes will be made in 2023 to support more landlords on the journey, by managing property voids while works are being undertaken to improve energy efficiency.
The lender will also provide a redesigned underwriting process for existing landlords, including ensuring its teams are all trained to understand the complexities of the property upgrades so they can effectively assess the properties involved.
Finally, it will be partnering with tax specialists who can provide advice and guidance on tax planning for part-time landlords looking to professionalise, including incorporating as a limited company and the treatment of qualifying capital expenditure.
Alongside these initiatives, OSB Group is launching series of new industry partnerships, piloting new uses of data to help tenants and landlords to make informed decisions.
These innovators include Sero, with whom OSB Group is testing a proof of concept that provides landlords with a free detailed survey delivering a pathway to a net zero home with other partnerships to follow.
The specialist lender is also creating a Landlord Leaders community to bring together brokers, landlords and other industry members to develop a collective manifesto for change in the first half of 2023.
Andy Golding (pictured), group chief executive, OSB Group, said: “The time has come for the Private Rented Sector to seriously consider what is next.
“We are on the precipice of change which will create significant benefits for tenants, but at what cost? There is an opportunity for the industry to rise to this new challenge and help support both professional and part-time landlords to ensure the industry thrives and continues to focus on its tenants.
“OSB Group is proud to partner with and support brokers, landlords and tenants across the industry and hope that the measures we plan to implement over the next couple of years will continue to drive positive, tangible change across the industry.
“We call on other industry participants to consider more actions that need to be taken to ensure the right support structures are in place.”
