Having been a landlord for two decades, you develop a sixth sense for when things are about to go south. When Russia invaded Ukraine and Martin Lewis started issuing future energy price hikes, I took heed.
Energy efficiency has long been a buzzword in my business, and with planned changes on the horizon, any half-awake property investor knows it is all about getting as close to the “C” grade as possible. Of course, with ageing housing stock and Victorian terraces being the staple of many landlords’ portfolios, it’s not going to be an easy task.
The Government may want to cut emissions and hope we all have heat pumps installed and insulation coming out of our nostrils within a few short years. But wanting, and actually making things happen, are two very different things.
I have tried to do my bit over the years. Every attic has thick loft insulation and when renovating, I have insulated all the walls internally. All windows are double glazed and gas boilers have been upgraded to the latest model (before they make them extinct!).
The problem is: despite the money I have spent, I am still only scraping a grade “D”. How I can get to the hallowed grade C remains to be seen, as without pulling apart the property and insulating every floor and every wall from the outside, it’s just not achievable. That is just not economically viable.
That is why earlier this year, with my mind on upcoming changes to the rules around energy performance certificates and the looming energy bills crisis, I had a rethink.
Instead of looking at the rental yields and rubbing my hands in glee, I asked myself, “Who can afford to heat this home?” While the rental market may be going insane and prices are hitting all-time highs, this is not sustainable.
People only have a limited amount of money and when it comes to choosing if they would rather pay the utility bills to have heat and light, they will choose that over paying me.
Of course, in the end, the sad truth is, not paying the rent will result in tenants losing the properties they were seeking to heat, but what I was looking to avoid was the interim period – the bit where a tenant doesn’t pay me, but I still have to pay the mortgage and the repair bills. It was this line of thinking that pushed me into selling multiple properties.
Landlord friends of mine were surprised given the high yields on offer, but it’s only a decent return if someone is actually paying the rent. What’s more, the ever-spiralling costs of labour and materials means maintenance, which has always been a big chunk of my costs, has increased to ridiculous levels.
Couple that with the delays in the court system, and any arrears, even if caught early, could grow to unsustainable proportions.
Thorough tenant referencing, guarantors and rental protection insurance will continue to grow in importance. But, more than ever, the most important thing will be having the right property to begin with.
In a day and age where for some tenants their utility bills will be higher than their rents, the equation needs rethinking. Any property owned now will need to have more money invested into it over the next few years to make it compatible with the new utility-driven-rental-market economy.
EPCs will be studied meticulously by future tenants wanting to know precisely what the running costs are. Those which don’t make the grade will likely fall in price and see reduced tenant demand. That’s no bad thing. But what it does mean is landlords need to be prepared to invest in their properties. Without that investment, you will not be a successful investor.
“Oh woe is me the landlord making families homeless while they cant afford heating. I am so down trodden and unlucky oh woe is me the world is truly a harsh and hard place for me.” – Torygraph landlord
>Having been a landlord for two decades, you develop a sixth sense for when things are about to go south. When Russia invaded Ukraine and Martin Lewis started issuing future energy price hikes, I took heed.
Thats really not impressive. I figured out things are going south having been a landlord for 0 minutes.
Am I reading that wrong? Why would you insulate the internal walls and not the external walls?? Muppet.
Seriously though this might actually be the start of house prices going back towards realistic levels. We’ve had interest rates at practically zero for years, lenders offering 5x salary mortgages, help to buy incentives etc. All of which makes mortgages easier to get and pushes up house prices. Now is obviously a fucking stupid time to buy a house, which should mean less demand and more supply. Pillocks like this landlord should be adding to that supply by trying to sell before a crash. House prices are likely to drop, a lot. Timing the drop, that’s the tough job.
My landlord put our rent up £100 the very month the cost of living crisis started and ofc we were lucky because she actually should be charging us a lot more.
This house she inherited from her aunt btw and has no mortgage on.
Some properties won’t reach EPC C by the nature of their property type, there should be exemptions for those properties. Otherwise half of Bath would be empty as people wouldn’t be able to rent the Georgian flats.
I know this is from a private landlord perspective but social landlords are having similar conversations at the moment. Communal energy costs have trebled and if you have a district heating system then that is counted as commercial even if it’s a block of social flats. Some of the people least likely to afford it will have to pay inflated prices and there’s not much the social landlord can do aside from provide fuel vouchers. Rents are capped (which is good morally but reduces the budget social landlords have to spend on maintenance) but even so it’s likely going up by 5%. Means that rent arrears will go up which reduces what social landlords can do to invest in things like energy efficiency. Undoubtedly there will be some landlords selling properties with low energy efficiency to avoid the costs associated with it
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Having been a landlord for two decades, you develop a sixth sense for when things are about to go south. When Russia invaded Ukraine and Martin Lewis started issuing future energy price hikes, I took heed.
Energy efficiency has long been a buzzword in my business, and with planned changes on the horizon, any half-awake property investor knows it is all about getting as close to the “C” grade as possible. Of course, with ageing housing stock and Victorian terraces being the staple of many landlords’ portfolios, it’s not going to be an easy task.
The Government may want to cut emissions and hope we all have heat pumps installed and insulation coming out of our nostrils within a few short years. But wanting, and actually making things happen, are two very different things.
I have tried to do my bit over the years. Every attic has thick loft insulation and when renovating, I have insulated all the walls internally. All windows are double glazed and gas boilers have been upgraded to the latest model (before they make them extinct!).
The problem is: despite the money I have spent, I am still only scraping a grade “D”. How I can get to the hallowed grade C remains to be seen, as without pulling apart the property and insulating every floor and every wall from the outside, it’s just not achievable. That is just not economically viable.
That is why earlier this year, with my mind on upcoming changes to the rules around energy performance certificates and the looming energy bills crisis, I had a rethink.
Instead of looking at the rental yields and rubbing my hands in glee, I asked myself, “Who can afford to heat this home?” While the rental market may be going insane and prices are hitting all-time highs, this is not sustainable.
People only have a limited amount of money and when it comes to choosing if they would rather pay the utility bills to have heat and light, they will choose that over paying me.
Of course, in the end, the sad truth is, not paying the rent will result in tenants losing the properties they were seeking to heat, but what I was looking to avoid was the interim period – the bit where a tenant doesn’t pay me, but I still have to pay the mortgage and the repair bills. It was this line of thinking that pushed me into selling multiple properties.
Landlord friends of mine were surprised given the high yields on offer, but it’s only a decent return if someone is actually paying the rent. What’s more, the ever-spiralling costs of labour and materials means maintenance, which has always been a big chunk of my costs, has increased to ridiculous levels.
Couple that with the delays in the court system, and any arrears, even if caught early, could grow to unsustainable proportions.
Thorough tenant referencing, guarantors and rental protection insurance will continue to grow in importance. But, more than ever, the most important thing will be having the right property to begin with.
In a day and age where for some tenants their utility bills will be higher than their rents, the equation needs rethinking. Any property owned now will need to have more money invested into it over the next few years to make it compatible with the new utility-driven-rental-market economy.
EPCs will be studied meticulously by future tenants wanting to know precisely what the running costs are. Those which don’t make the grade will likely fall in price and see reduced tenant demand. That’s no bad thing. But what it does mean is landlords need to be prepared to invest in their properties. Without that investment, you will not be a successful investor.
“Oh woe is me the landlord making families homeless while they cant afford heating. I am so down trodden and unlucky oh woe is me the world is truly a harsh and hard place for me.” – Torygraph landlord
>Having been a landlord for two decades, you develop a sixth sense for when things are about to go south. When Russia invaded Ukraine and Martin Lewis started issuing future energy price hikes, I took heed.
Thats really not impressive. I figured out things are going south having been a landlord for 0 minutes.
Am I reading that wrong? Why would you insulate the internal walls and not the external walls?? Muppet.
Seriously though this might actually be the start of house prices going back towards realistic levels. We’ve had interest rates at practically zero for years, lenders offering 5x salary mortgages, help to buy incentives etc. All of which makes mortgages easier to get and pushes up house prices. Now is obviously a fucking stupid time to buy a house, which should mean less demand and more supply. Pillocks like this landlord should be adding to that supply by trying to sell before a crash. House prices are likely to drop, a lot. Timing the drop, that’s the tough job.
My landlord put our rent up £100 the very month the cost of living crisis started and ofc we were lucky because she actually should be charging us a lot more.
This house she inherited from her aunt btw and has no mortgage on.
Some properties won’t reach EPC C by the nature of their property type, there should be exemptions for those properties. Otherwise half of Bath would be empty as people wouldn’t be able to rent the Georgian flats.
I know this is from a private landlord perspective but social landlords are having similar conversations at the moment. Communal energy costs have trebled and if you have a district heating system then that is counted as commercial even if it’s a block of social flats. Some of the people least likely to afford it will have to pay inflated prices and there’s not much the social landlord can do aside from provide fuel vouchers. Rents are capped (which is good morally but reduces the budget social landlords have to spend on maintenance) but even so it’s likely going up by 5%. Means that rent arrears will go up which reduces what social landlords can do to invest in things like energy efficiency. Undoubtedly there will be some landlords selling properties with low energy efficiency to avoid the costs associated with it