Almost half (49%) of brokers have had no enquiries from property investor clients regarding proposed changes to the rules around Energy Performance Certificates (EPCs), suggesting that too many are taking a ‘wait and see’ approach, according to Maeve Ward, director of commercial operations at Central Trust and Mercantile Trust.
Mercantile Trust published the results of a survey conducted among 150 brokers, which found that among brokers themselves, 61% overall were either somewhat or very confident that they understood the Government’s proposed EPC rules.
However, this left a considerable proportion who were either not very confident (12%), less confident (12%) or neither confident or not confident (15%).
Ward told The Intermediary: “The thing that both surprised and didn’t surprise me, being completely honest, is just the fact that a high percentage either weren’t doing anything or didn’t feel informed.
“Everyone thinks 2025 is still such a long way away, and accompanied with that, this is still something the Government has to confirm is definitely happening.
“People are perhaps thinking, ‘well, I’ll just wait and see’.”
She added: “I don’t think it’s through lack of effort on either the brokers’ or lenders’ part, it’s just a case that everyone’s got so many different things going on, and it feels like they’ve got ample time to to get it sorted once it reaches the top of their agenda.”
Ward said that, with growing regulatory pressures and tightening budgets, landlords might also be choosing to wait and consider their options, with a view to potentially leaving the market if the costs of improving EPCs prove too much.
However, she added that if too many people take this ‘wait and see’ approach to EPCs, only to decide to remain in the market, they could face a bottleneck in terms of labour and materials down the line, and face potential fines – up from £5,000 to £30,000 under the proposed rules – for not complying in time.
The majority of respondents (60%) had sold no bridging loans over the past 12 months for the purpose of financing energy efficiency refurbishments, and 34% said they either expected the amount of bridging sold for this purpose to either stay the same or reduce over the coming year.
Almost seven in 10 respondents (69%) wanted lenders to provide specific lending solutions for those clients looking to improve the energy efficiency of their properties, with many suggesting that these borrowers should be able to access better rates when work was completed.
However, Ward said: “There are lots of different alternative solutions, and I say solutions because that’s what they are.
“There is more than one way that somebody will be able to increase the EPC rating on a property, or properties within a portfolio.
“It’s about brokers and lenders making it more widely known as to how they can source those, so that the solution the customer goes with is the right outcome for them.”
She added: “The specialist market is a perfect landscape for people who are finding themselves in situations where the property is not quite where it needs to be, but they need that flexibility, they need that common sense approach where someone can understand their intention.”
The research was released to coincide with the launch of Mercantile Trust and Elmhurst Energy’s EPC Hints and Tips guide for landlords and property investors.
The guide covers: EPC basics; benefits and advantages; funding EPC improvements; opportunities; and help and assistance.
Ward said: “Working with Elmhurst Energy, we have produced our EPC guide because everyone in the industry needs to play their part in meeting the demands of the changing regime surrounding energy efficiency.
“We encourage brokers to download the guide and share it with their property investor clients.
“The key message to brokers and their clients is that doing nothing is not an option. Our guide provides all the information they need to create a viable strategy to deal with the EPC issue, including outlining how landlords can finance improvements to rental properties.
“Bridging lenders such as Mercantile Trust have already been funding energy efficiency-related refurbishments and are ready to meet the inevitable increase in demand.
“The main thing is to not delay any further.”
