Mortgages for Business is committed to keeping both our staff and clients safe during the COVID-19 outbreak while maintaining the best service possible. Our teams are working from home, but don’t worry, you can still contact us in the usual ways.
To read our comprehensive FAQ guide on how the emergency interest rate reduction and Coronavirus outbreak could affect your mortgage, please click here.
If you want to request a payment holiday, please contact your lender directly. For lender contact details, click here.

No EPC no buy to let mortgage

In future, landlords may struggle to get buy to let finance if the property does not have the correct Energy Performance Certificate rating, as Paul Martins, Head of Buy to Let Mortgages explains.

Graded from A (most efficient) to G (least efficient), Energy Performance Certificates (EPCs) contain information about a property’s energy output and costs. They are required when a property is rented or sold (or built), are valid for 10 years, and must be ordered before the property is rented or sold.

From 1st April 2018, residential landlords will not be able to grant a tenancy to either new or existing tenants if the property’s EPC rating is F or G.

From 1st April 2020, If there is a tenant already in situ, it will become illegal for residential landlords to continue letting the property out if the EPC has a rating of F or G!

Fines of up to £5,000 may be imposed on those in breach of the rules.

Not only are these new rules important from an energy compliance perspective, they are also important for landlords looking for buy to let finance – both for purchases and remortgages.

When applying for finance, in future, landlords should expect to provide the lender with evidence of a valid EPC showing a suitable rating. Failure to do so could result in being refused finance. Keeping the EPC valid and compliant is also likely to be written into standard mortgage contract terms and conditions.

We could also see surveyors down-valuing property with poor EPC ratings. 

Further down the line, we could even expect lenders to have access to either an EPC database to check that borrowers are compliant or write, periodically, to request site of a valid EPC.

Next steps…

Apply for an EPC

It’s a no-brainer to make sure you get an EPC for each of your properties.

Talk to us about financing EPC recommendations

If you plan to upgrade your property so that it qualifies for an A-E rating do talk to us about finance options if you need to raise capital.

If you have sufficient equity, you could consider a further advance or remortgage on either your home or the rental property. If you’re on great rate, a second charge may be more appropriate – whatever, it’s best to explore all the options.

Paul Martins has left Mortgages for Business for pastures new. For more information or for any questions relating to this blog, please contact the BTL Team on 0345 345 6788, where one of our consultant mortgage brokers will be happy to assist. 

We look forward to helping you, and of course, we’ll keep you updated of EPC developments that may affect your borrowing requirements.



You may also be interested in:

Setting up an SPV limited company
Buy to let lenders which offer mortgages to limited companies usually require the limited company to be an SPV (Special Purpose Vehicle). Jeni explains what one is and how to get one.

FAQs on Ltd Co borrowing for buy to let
Frequently asked questions on limited company borrowing for buy to let mortgages.

How the new buy to let underwriting standards will affect lenders and borrowers
Steve gives his views on what the implications of tougher interest cover ratios and increased background checks will mean for landlords and buy to let lenders.

Portfolio Landlords' Checklist
Steve Olejnik describes what lenders are likely to require from portfolio landlord borrowers after the implementing the next phase of PRA guidelines.


Get in contact with us: 0345 345 6788 or ...

Submit an enquiry
Arrange a call back