EPC Updates : As you will be aware there is new legislation coming into force from 1st April 2018. This means that the EPC rating for a new tenancy or an extension of a tenancy has to be a minimum of an E.The large majority of properties will fall in this category however in York we have about 2% of rental EPC’s rated an F or G. Since 2008 there have been many updates to the EPC software and interestingly in November there will be an updated increased thermal efficiency for solid brick houses. Due to recent work undertaken it has been found that solid wall houses are more thermally efficient than previously thought. Also next year in York, we will have at least 2000 EPC’s expiring as they will have reached their ten year life span and a new EPC will then be required at the next trigger point, which would be a new lease or a lease renewal.
We are checking all our properties and will let you know if your property falls into this category, and we can discuss ways of improving and updating the property that can help. We are also keeping an eye out for any government initiatives that may help fund these, such as the old Green Deal schemes. Watch this space.
Tougher rules for BTL Mortgages
Unfortunately, the government continue to hammer landlords this year with new rigorous stress tests involved in any new mortgage you apply for. In short, most BTL mortgages will be given on the basis of your whole portfolio. Whilst this is hopefully not an issue for properties in York (as on the whole we do have good yields) there are a few properties that are worth more in Capital and therefore any yield is still a good one. Landlords with several properties may be asked to provide a business plan to show profitability across the board. Mortgagors will be expected to show that they can pay back IF the interest rates hit 5.5%
This is just one of a few changes to negatively impact landlords this year with stamp duty and Clause 24 also initiated. Limited Companies will still be exempt from the new rules though so it may be worth discussing with a financial advisor moving forward.
The government is still aiming to discourage the rental market, but whilst they are not providing the promised amounts through new building and social housing it can only be a matter of time before we see an about turn and Landlords welcomed again.
RightMove Figures
RightMove have published their ‘Little Blue Book’ of facts and figures throughout the country (we have copies in the office if anyone would like one?) The figures in York aren’t as bad as some areas of the country and show that overall whilst the last year rents and sales have fallen slightly, they are significantly higher than they were 5 years ago
For example:An average 3 -4 bed house is up 1.2% on last year, with 12% increase in 5 years
Compare that to Northumberland or Teesvalley who have had no increase in 5 years are down 1% on last year.
However, in the Midlands these figures are up by 6-8% on last year and up by as much as 30% by 5 year margins
Greater London of course is the biggest changes with up to 60% increases in sales prices in the last 5 years!
Lettings is similar:
2 bed rentals in York is down by 0.4% on last year but up by nearly 10% in 5 Years
Northumberland and Tees Valley is down 1.5% and 2.3 accordingly
Greater London- skewing the figures as usual: all are sown on last year, but some boroughs still showing increases of up to 305 since 5 years ago
Perhaps there’s some connection between Westminster and where MPs stay and the ideas behind penalising landlords in the article to the right?
