Govt. plans to target mortgages to EPC's could leave many homes unsaleable

NameUnavailable

Section62 said:

NameUnavailable said:

Are the government on a crusade to trap people in homes they can't sell? What with the cladding scandal, upcoming fire safety regulations, new regulations about energy EPC ratings for rental property (minimum C rating) on now this news, they really are trying their best to make many homes into money pits or worthless.

The article says -

Those targets* could become mandatory “if insufficient progress” were made, according to the documents.

[*See below]

Nationwide have been banging on about 'green' mortgages for several years.  Now they have a target of 50% of their mortgage book being EPC C or better by 2030, and since April this year are giving cashback on properties with an A or B rating.

https://www.nationwidemediacentre.co.uk/news/nationwide-launches-cashback-incentive-to-encourage-energy-efficient-homeownership

The Nationwide pledge is spookily similar to what the article describes as -

Measures being considered include voluntary targets* for banks to improve the average energy performance certificate rating of the homes in their lending portfolio to at least band C by 2030.

[*See above]

So is that "trying their best to make many homes into money pits or worthless", or following the way the market is heading already?

IMV the main issue is how unfit for purpose the EPC rating system is.  Improve that and the risk of people being trapped in money pits or worthless property will be much lower.

And of course there will always be cash buyers looking for a more economical purchase.

Yes, could become mandatory! So Nationwide have a self imposed agenda to lend on greener property but we are talking about this being mandatory. Nationwide could be said to be simply trying to get ahead of the curve by lending on more efficient homes (which must also mean that they are declining mortgages on some homes with low EPC ratings).

I agree that EPC is not currently fit for purpose - you just need to look at some to see how much variance there can be for the same type of property. I haven't read anything to suggest that the government are looking to change anything to do with the way EPC's are issued however, rather they are basing their plans a flawed system which will lead to greater pain for many homeowners.

Sunsaru

NameUnavailable said:

tacpot12 said:

As ProDave says, people really need to start worrying about the EPC of the properties they are buying, but I don't think any government would get away with making it difficult to get mortgages on 40% of the UK housing stock. There would be riots, and a lot more homelessnes.

Homelessness yes, I agree. Riots? hardly! Maybe some letters in the local papers, the odd petition but not riots. When did we last see riots in the UK over anything political? Brexit? No. Lack of action over Covid and 180k deaths? No. Who is going to riot over house prices?

Only the people who thought buying a house would be a cash cow. Everyone else will just get on with it...

Pixie5740

I read something recently about EPC ratings and proposals from the Scottish government and the private rental sector where properties should meet at least C where technically feasible and cost-effective, at change of tenancy, with a backstop of 2028 for all remaining existing properties. 

Seems a bit pointless because I doubt it’s technically feasible for many properties in Edinburgh’s Old Town, the sandstone tenements in Glasgow or the granite buildings in Aberdeen.  

https://www.homeenergyscotland.org/energy-efficiency-support-for-landlords/

Crashy_Time

Sunsaru said:

NameUnavailable said:

tacpot12 said:

As ProDave says, people really need to start worrying about the EPC of the properties they are buying, but I don't think any government would get away with making it difficult to get mortgages on 40% of the UK housing stock. There would be riots, and a lot more homelessnes.

Homelessness yes, I agree. Riots? hardly! Maybe some letters in the local papers, the odd petition but not riots. When did we last see riots in the UK over anything political? Brexit? No. Lack of action over Covid and 180k deaths? No. Who is going to riot over house prices?

Only the people who thought buying a house would be a cash cow. Everyone else will just get on with it...

They will be too busy paying their mortgages to riot.

Section62

NameUnavailable said:

Yes, could become mandatory! So Nationwide have a self imposed agenda to lend on greener property but we are talking about this being mandatory. Nationwide could be said to be simply trying to get ahead of the curve by lending on more efficient homes (which must also mean that they are declining mortgages on some homes with low EPC ratings).

self imposed agenda = "voluntary targets"

All the announcement is doing is endorsing the thing Nationwide BS are already doing and suggesting that other mortgage providers should follow suit.  (if they don't then the situation might be reviewed and made mandatory)

However, ask yourself why Nationwide BS decided to adopt that policy (without any kind of vote by the membership)

They are not doing so to lose money or customers.  They perceive improving their 'green' credentials will be attractive to potential customers, increasing custom, and ultimately growing the business/increasing profit.  It could also be argued that the price premium already existing on properties with A-C ratings means that lending on these is less of a risk because they will be the easier ones to sell in case of repossession.

If Nationwide BS think this is a good idea, why would you think that other providers won't do the same?  It is a quick-win piece of greenwashing to convince customers of their green credentials - and it comes at no direct cost to the financial institution involved.

Yes, it could become mandatory.  But I rather think the majority of the industry will have copied Nationwide's approach long before government enforcers start muttering about legislation.

Who wants to be the last 'dirty' 'polluting' bank/building society being forced by law to follow the market?

And if this policy was going to lead to riots then why didn't they start back in April, outside Nationwide BS branches?

NameUnavailable said:

I agree that EPC is not currently fit for purpose - you just need to look at some to see how much variance there can be for the same type of property. I haven't read anything to suggest that the government are looking to change anything to do with the way EPC's are issued however, rather they are basing their plans a flawed system which will lead to greater pain for many homeowners.

The industry is quite happy with the current system.  It will only change when there is sufficient pressure for it to change.

The vast majority of consumers are not interested in the accuracy and representative quality of the current EPC system.  If they are concerned at all then it is whether the property is an A or B, or is Ok to use as a BTL. There is no desire to look under the bonnet.

Pressure for change will only happen when enough people are affected by the problems the current system contains.  Until then, people like you and me pointing out the flaws is broadly equivalent to talking to lampposts.

sammyjammy

I own a mid terrace Victorian house like tens of thousands of others across the country, I can't imagine how much money it would cost to get our properties to a C if its even possible!

Niv

sammyjammy said:

I own a mid terrace Victorian house like tens of thousands of others across the country, I can't imagine how much money it would cost to get our properties to a C if its even possible!

Mine is 400 yo and part cob and obviously no cavity walls etc. I think a D rating would be an achievement!

Jenni_D

Is this headline a sop to the IB idiots, and a means of reducing the amount of glue in the community? 😉😁

Section62

Jenni_D said:

Is this headline a sop to the IB idiots, and a means of reducing the amount of glue in the community? 😉😁

No, because the IB 'folks' want the taxpayer to fund the insulation, and probably pay for all the organising of installations as well.


The approach involved in this scheme (e.g. what Nationwide are doing) is effectively pushing people towards using some of the capital in their property to pay for insulation (/energy efficiency) improvements rather than concentrating (solely?) on how trendy the kitchens and bathrooms are.

Imagine a time where EA adverts - rather than having 50% of the pictures of the kitchen - actually include pictures of the insulation in the loft, a close up of the boiler/heat pump, and details of the window specs rather than just "Full DG throughout" 

BikingBud

sammyjammy said:

I own a mid terrace Victorian house like tens of thousands of others across the country, I can't imagine how much money it would cost to get our properties to a C if its even possible!

Would it be less than the perceived inflated value due to just sitting in it?

Rather than sinking 15-20k into a house because someone fancies a new bathroom or kitchen, how about investing the money to improve the energy efficiency?