The better the EPC rating, ‘the bigger the discount’

Paragon Bank and Foundation Home Loans have this week announced the launch of new green buy-to-let products for landlords purchasing properties with an EPC rating of A, B or C, as part of a wider effort to encourage more people to improve their efficiency rating.

The way a residential building is constructed, insulated, heated, ventilated and the type of fuel used, all contribute to its carbon emissions, and can now seriously impact on the cost of running the property and even its value.

George Gee, commercial director at Foundation Home Loans, said: “The better the EPC rating, the bigger the [mortgage] discount, and our aim is to help meet the needs of landlords who want a more energy-efficient property portfolio.”

Foundation’s product pricing starts at 1.99% for properties with an energy efficiency rating of A, which is a discount of 3.1% for two years; for products with an energy efficiency rating of B, the current rate is 2.29% (a discount of 2.8%); and for properties with an energy efficiency rating of C, the current rate is 2.49% (a discount of 2.6%).

“The government has itself set an ambitious target of net zero greenhouse gas emissions by 2050, and it’s widely thought that in order to do this we’ll need to eliminate energy inefficiencies from UK housing stock by 2030,” Gee added.
Paragon Bank has expanded its range of green buy-to-let products with the launch of four further advances at 80% loan-to-value (LTV), with initial fixed rates starting at 3.75%.

Homeowners and buy-to-let landlords could reap significant competitive advantages by shifting to a ‘green’ model of potentially adding value to a home.

This model uses resources more efficiently and is creating an appetite for innovation in areas like renewable power in the home.
According to the latest English Housing Survey, released this week, 38% of homes in the PRS were in EPC bands A to C in 2019, up from 13% in 2009.

Some of 36% of owner-occupied properties in the same band range.

Ella Pumford at St. Modwen Homes commented: “Our homes are quickly becoming leaders in the green transition, finding more sustainable ways to improve energy efficiency, use more renewable electricity, and lowering our home expenses.”



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