A specialist buy to let lender is making changes to its lending conditions to ensure its residential and commercial borrowers conform with new MEES energy efficiency rules.
It is though that OneSavings Bank, through its Kent Reliance and InterBay brands - is the first to link the new energy standards with the granting of buy to let loans.
Under MEES a rental property must meet a minimum Energy Performance Certificate rating of E from April 1 when it becomes newly-tenanted; this will extend to all rental properties, irrespective of the tenancy situation, by April 1 2020.
So in future OneSavings Bank will insist that the borrower have evidence that there is a minimum EPC rating of E on the property to be purchased.
In some circumstances a condition will be included in the formal mortgage offer to ensure that the property receives an E rating or better within three months of completion.
“The new regulations bring added complexities into a highly regulated market, but we want to ensure the new requirements are as straightforward as possible” explains Adrian Moloney, sales director at OneSavings Bank.
“Ensuring that properties are energy efficient is important and a reflection of the market’s drive towards professionalisation. However, we wanted to make sure that a low rating didn’t necessarily mean landlords would be prohibited from accessing lending. Instead, we’ve introduced proportionate terms into our conditions to raise awareness and act as an incentive for landlords to improve their properties, which will ultimately help them attract tenants.”