After months of uncertainty, this year will undoubtedly be reflected upon as a tumultuous period for landlords.
Scrapping EPC regulations
The announcement made by Rishi Sunak in September that the government would be scrapping the proposed EPC regulations was understandably met with a mixed reaction.
On the face of it, this may appear like welcome news to landlords yet to prepare for the incoming rule changes.
However, a sense of frustration could be felt by any individual who had already outlaid significant costs on ensuring adherence to the now obsolete regulation changes, particularly amid the ongoing cost-of-living crisis.
We are also in the run-up to a general election, scheduled to place take next year.
If Labour wins, there is every chance that the EPC rules could be reintroduced.
If a requirement along these lines comes to pass, it is likely that a deadline extension would be granted to property owners, giving them suitable time to make changes.
Those, therefore, that have already implemented energy efficiency improvements may once again appreciate their proactive decisions.
Even in the case that changes aren’t reintroduced, it is important landlords know that they’ve made a decision that can still benefit them while creating a more enjoyable living experience for their tenants.
The prospect of reaping the long-term advantage of a more marketable property (both for sale and to let) compared to what would have been uncompliant alternatives should offer plenty of reassurance.
The assurance of lower energy bills will likely make rental properties more attractive to potential tenants searching for homes that are more affordable to heat.
Halting the rise in rates
News that the Bank of England has held interest rates in November following September’s decision to end the 14th consecutive increase from December 2021, will be taken as a sign that inflation is finally cooling.
As tenants have endured rent increases to support landlords’ heightened overheads, the news is anticipated to encourage both parties that they may have weathered the worst of the financial storm.
Concerns remain for those coming to the end of a fixed rate term, as they are likely to find that the cost of monthly repayments will rise considerably.
It is also unlikely that rates will return to their historic lows of almost two years ago anytime soon.
This means it may yet take some time for landlords to adjust their expectations of what a ‘new normal’ may look like going forward.
It is not surprising to see a number of portfolio properties listed for sale amid the ongoing period of continually high interest rates.
As always, our real estate finance division at STB can provide the assistance and support required for landlords looking to discuss plans to obtain finance for property investment.
Chances of a rent freeze
The recent rise in interest rates has forced landlords to increase rents paid by tenants to cover some of their own mounting costs.
This has consequently led to repeated calls for a nationwide rent freeze.
Suppressing the income available to landlords will not only result in them struggling to meet their interest payments, but it will also see them unable to maintain and upgrade properties, leading to a deterioration in the quality of rental stock.
Regardless of a rent freeze, we encourage landlords and real estate property developers concerned about this to speak to their lenders to get on the front foot about available options to them. At STB REF, we are always available to discuss the available avenues with real estate finance and offer unique property loans that cannot be obtained through high street lenders.
Steering through uncertainty
Notwithstanding the challenges landlords are currently enduring, it is key that they can continue to remain positive and steer through the path of financial uncertainty.
STB remains dedicated to providing various financing solutions that can help landlords in acquiring property finance to ensure stability during turbulent times.
