In a bid to help landlords make their buy to let properties as environmentally friendly as possible, one lender has launched a green further advance range for those who have been accepted for the Government's Green Homes Grant. Jeni Browne explains how it works and what it means for the mortgage market going forward.
With proposed legislation changes making it highly likely buy to let properties will have to meet a minimum EPC rating of C by 2030, making energy-saving improvements to your portfolio may be at or near the top of your to-do list.
The Government's Green Homes Grant launched back in the Summer of 2020, is available for all home-owners and landlords looking to improve their property's energy-efficiency. The £3 billion scheme offers vouchers to cover up to two-thirds of the cost for specific measures, to a limit of £5,000. In light of the further lockdowns this winter, the scheme was extended to March 2022, when all vouchers must be redeemed and works complete. For more information about the scheme and how to apply, see our blog on the topic, here.
Specialist buy to let lender, Paragon, has launched a new range of further advance products for its clients, specifically for those landlords using the Government's Green Homes Grant Scheme. With no product or application fees (and a free valuation), it aims to provide landlords with the additional finance not covered by the Government's scheme needed to complete the energy-saving improvements.
A further advance is when you take out additional borrowing with your existing mortgage lender. It’s useful if you don’t want to remortgage during your ERC period, and is usually charged at a different rate to that of your main mortgage.
The further advance rates start from 3.35% and are available for two and five-year fixed terms up to 75% LTV. According to Moray Hulme, Director of Mortgage Sales at Paragon, their "research shows that a large proportion of landlords are interested in making their properties more energy-efficient". With environmental concerns at the forefront of many people's minds, it's understandable that many will want to do all that they can to provide greener living for tenants (and that tenants will want to live in environmentally friendly homes). Of course, the other added benefit is reduced energy bills, undoubtedly an excellent selling point for any rental property in today's market.
While currently unique to Paragon, I imagine it won't be long before more buy to let and probably bridging lenders launch similar offerings. So, if you're not a Paragon client, do keep an eye out and we will, of course, keep you up to date with any news!
If you're still keen to make improvements to your buy to let properties, whether green or purely cosmetic, there are other finance options available to you. Speak to our expert buy to let brokers today about further advance, remortgage and bridging finance options which may be available to you. Call 0345 345 6788 or email firstname.lastname@example.org for a no-obligation quote!