Is Now the Time for Landlords to Invest?
House prices hit recent low
If you’re looking to expand your portfolio, there’s some good news on the horizon. New research from Nationwide has revealed that March saw a 3.1% drop in house prices, compared to the same period in 2022.
In addition to the annual drop, there was a drop of 0.8% from the previous month.
Spring is historically when we see green shoots of movement in the housing market, with buyers looking to make purchases. However, this is the seventh month in a row that there has been a drop in prices, which suggests that the cost-of-living crisis is overriding traditions.
Nationwide chief economist Robert Gardner has named last year’s mini-Budget as a possible cause, saying:
Activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago.
Prices have now dropped below their August 2022 peak, great news for buyers, not so much if you are looking to sell though.
Three-year respite for landlord legislation
If you are looking to invest in property, one of the key pieces of paperwork you will need to check out is the property’s EPC. The minimum energy efficiency standards (MEES) allowed for rented properties are a minimum of an E rating on their Energy Performance Certificate (EPC), so an investment in a property with a lower rating could be a costly purchase.
Do bear in mind that this is set to change too. The rating was set to move up to a minimum of C for newly-let rentals by 2025 (a deadline which is coming up really quickly!), however there is news on that front. The Daily Telegraph recently reported that the date may be being pushed back to 2028.
If this is proved to be true, it is excellent news for landlords. When the Department for Energy Security and Net Zero suggested 2025 for newly-let rentals to hit the C rating, and 2028 for all other rented properties, there was much concern about how such a huge leap would be achievable for landlords.
We tackled the issue in a recent webinar with expert James Tanner and discussed the ways you could go about improving your property’s energy efficiency, all of which still stand, however having another few years to spread the cost and carry out works makes life significantly easier.
However, it’s not all good news (of course). Despite the potential respite, it has been reported that ministers are considering fines of up to £30,000 for landlords who fail to upgrade their properties by 2028.