Equity release can solve EPC compliance costs

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New rules mean that landlords are prevented from issuing new leases for commercial buildings that have not achieved at least an Energy Performance Certificate (EPC) of E. In some cases, it can cost a lot to improve energy efficiency, but landlords may be able to remortgage their property to finance energy efficiency work.

To achieve a better EPC rating does not have to cost a lot. Adding insulation to lofts, roofs and cavity walls or changing, lighting designs are not major jobs. Other work, including installing solar panels, double-glazed windows and adding internal walls as a barrier to air-conditioned areas can be pricey.

If a landlord is struggling to finance the upgrade work, as long as they have enough equity in their property, they can release this equity by means of a remortgage. Landlords who own a building which was purchased a few years ago using a commercial mortgage should have sufficient equity to cover major energy efficiency work.

Some investors are purchasing low energy efficiency buildings at low prices and then improving them. This both increases energy efficiency and adds value to the property. A commercial bridging loan can be used to upgrade these building.

Regulations also affect buy to let landlords who may need to upgrade the EPC ratings of their properties.

Tenants will benefit from building upgrades as it lowers energy bills. Buildings rated C or higher will make it easier to attract new tenants who may be prepared to pay higher rents in return for low energy bills.

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