The Investors Chronicle has published ab article guiding landlords towards mortgage deals.

It can be seen here and says:

As the political landscape in the UK shifts with Labour now in power, landlords should prepare for significant changes in the rental market, particularly regarding tenant protections and energy efficiency standards.

Labour has made a firm commitment to ending Section 21 “no-fault” evictions, which allow landlords to evict tenants without needing to provide a reason. This move is expected to be one of the key renter protections that Labour will introduce in the near future. Alongside this, stricter rules concerning the energy efficiency of rental properties are likely to emerge. Labour’s manifesto promises to ensure that homes in the private rental sector meet minimum energy efficiency standards by 2030, though the exact nature of these standards is still unclear.

Energy efficiency standards are a major concern for landlords, particularly following the previous government’s delay in requiring newly rented properties to meet an Energy Performance Certificate (EPC) rating of C or above by 2025. Labour could reintroduce and possibly expand these regulations, making it a priority to decarbonize the private rented sector to meet the UK’s climate targets.

For landlords looking to stay ahead of potential regulations, green mortgages offer a way to finance energy-efficient improvements. These mortgages either reward landlords for buying or remortgaging properties with high EPC ratings (A or B) or offer cashback incentives to retrofit less efficient properties. However, the current green mortgage deals are not always financially attractive. For example, average interest rates for green buy-to-let mortgages have risen dramatically, with two-year fixed rates at 7.62% and five-year fixed rates at 7.34%, compared to non-green mortgage rates of 5.45% and 5.51% for two and five-year deals, respectively.

Experts like Huy Le from Knight Frank Finance note that these offerings aren’t compelling enough to drive significant demand, especially for older properties such as Victorian homes, which are often rated EPC D. The costs of retrofitting such properties are high, making it difficult for landlords to justify the investment, especially outside London and the South East, where property prices are lower, but retrofitting costs remain high.

For landlords with properties in higher-value areas, retrofitting may still be worthwhile despite rising costs, which have increased from an average of £60,000 to £75,000 due to inflation. But outside of these areas, landlords may find it hard to make green mortgages work financially.