New research from Knight Frank shows that buy-to-let landlords are facing a huge bill to upgrade their properties to an Energy Performance Certificate (EPC) rating of C or above.
Government Legislation
The government is currently consulting on legislation that would require all rental properties to have an EPC rating of C or above by 31 December 2025 for new tenancies and by 31 December 2028 for existing tenancies.
Under current regulations, tenanted properties are required to have an EPC rating of E or above. It is estimated that around 60% of the 4.8 million households in the private rented sector currently have a rating of D or below.
On average the cost of upgrading a property to an EPC rating of C is around £9,260. So landlords could face a combined bill of £17.9 billion.
Read 'Why Are Buy-to-Let Landlords Looking For Alternative Investments?' here.
Buy-To-Let Landlords to Exit the Market
A survey by the National Residential Landlords Association (NRLA) revealed a third of buy-to-let landlords expect to sell some of their properties this year. That’s the highest level in over six years.
There are a number of reasons for this including:
- House price growth has been slowing over the last 6 months and the OBR expects house prices will fall by 10% by 2024 due to the impact of higher borrowing costs and the cost of living crisis.
- Data from online property specialist My Auction showed that mortgage payments are now exceeding rental incomes, as interest rates on buy-to-let mortgages rise, following Bank of England interest rate hikes.
- Changes made to mortgage interest tax relief in 2020 mean landlords are no longer able to claim tax back on their mortgage repayments.
- The potential legislative changes outlined above.
Alternative Investments for Buy-To-Let Landlords
Owning the right type of buy-to-let can still be a good investment depending on the property and whether or not you are funding a lot of debt in the face of falling property values. However the new regulations and economic environment may be pushing you to consider something more straightforward instead.
If you are a landlord that has recently sold or are looking to sell a property and are considering alternative investment options, then we’d love to hear from you.
The Impact of Capital Gains Tax on your investment
The annual tax-free allowance for Capital Gains in the UK has just reduced from £12,300 to £6,000. It will reduce again in April 2024 to £3,000.
This means that without careful planning, any individual selling an asset for a gain will likely pay more in CGT than prior to April 2023.
Don’t worry, we have a solution for you!
If you’re an investor in the UK, gold and silver ‘Legal Tender’ coins are exempt from CGT. This means you can make an unlimited tax-free profit on investments of any size and value on any legal UK currency coins.
Examples of CGT-free UK coins include Royal Mint Britannia Coins, Royal Mint Sovereign Coins, Royal Mint Queens Beast Coins and Royal Mint Tudor Beast Coins.
When searching for Capital Gains Tax-free coins on our website, tick the “UK” search filter in the left-hand menu.
Browse all bullion coins that are Capital Gains Tax-Free here.
Here To Help
We recommend that all readers should do their own research before making any purchases, but if you’d like to speak to a member of the team for some additional guidance, we’d be delighted to hear from you at 01769 618 618, or you can email us at sales@bleyer.co.uk, and we’ll get back to you asap.
