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One Savings Bank confirms minimum energy rating on BTL and TMW brings back 80 pc LTV fixed products

One Savings Bank confirms minimum energy rating on BTL, and TMW brings back 80% LTV fixed products

One Savings Bank has confirmed it will lend only on residential buy-to-let and commercial properties that achieve an E rating or better on energy performance.

The lender has changed its conditions for residential BTL and commercial mortgages through Kent Reliance and InterBay to accommodate the incoming energy efficiency regime.

The borrower’s solicitor will now be required to prove the property has achieved the E rating, but a three-month renovation window many be permitted for commercial properties.

From 1 April it will be unlawful to grant a new tenancy on any residential or commercial property with an energy performance certificate (EPC) rating of F or G.

Furthermore, on buy to let properties, all mortgage offers will now carry a requirement for the acting solicitor to advise the borrower that any properties rented out in the private rented sector must have a minimum EPC rating of E.
Commercial properties that do not meet the minimum standard E rating will be referred to its real estate team to review. Where appropriate, a condition will be included in the formal mortgage offer to ensure that the property receives a rating of E or above within three months of completion.

One Savings Bank sales director Adrian Moloney said: “The new regulations bring added complexities into a highly regulated market, but we want to ensure the new requirements are as straightforward as possible for our broker partners.

“Ensuring that properties are energy efficient is important and a reflection of the market’s drive towards professionalisation; however, we wanted to make sure that a low rating didn’t necessarily mean landlords would be prohibited from accessing lending.

“Instead, we’ve introduced proportionate terms into our conditions to raise awareness and act as an incentive for landlords to improve their properties, which will ultimately help them attract tenants,” he added.

There are still around 300,000 rental homes that are rated F or G, although this number has fallen from 700,000 in 2012, according to trade body Arla Propertymark.

Elsewhere, from today The Mortgage Works is reintroducing 80% LTV buy-to-let mortgages to its range.

In May 2016, following tax changes, the lender withdrew its 80% options and lent only to 75% LTV.

The new increased offer applies to purchase and remortgage products for first-time and experienced landlords, as well as let to buy. The same criteria applies to apply to products available through the firm’s limited company range, which is currently being piloted.

Two-year fixed rate 80% LTV products start at 2.99% with a 2% fee and 3.99% with no fee, and are available for purchase and remortgage. Five-year fixed rate deals start at 3.59% with a 2% fee and 4.19% with no fee.

The maximum LTV for buy-to-let mortgages on houses of multiple occupation will increase from 65% to 75%.


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