All about Energy Performance Certificate (EPC)

Effective from October 1, landlords in the UK letting their property are legally bound to furnish Energy Performance Certificate to tenants. Thousands of second property owners are confused over what they are expected to do.

An Energy Performance Certificate (EPC) grades buildings on the basis of energy efficiency and carbon emissions. ‘A’ grade is assigned to very efficient and ‘G’ graded to poorly rated.

The report is prepared by the officially appointed qualified energy assessors. An EPC is always accompanied by recommendations which list various cost effective measures and other improvements to enhance the energy ratings of the property. It could include recommendation for installing low carbon-generating systems. The certificate also provides information as to which grade the property would be elevated if all recommendations were implemented by the owner.

EPC is mandatory for those who let their property to a new tenant, with exceptions to those landlords who take lodgers or let their second home for holiday rental.

If a property is bought for children to live in and if some of its rooms were let while children were studying in university, an EPC would not be needed.

It can cost from 50 pounds to 150 pounds, depending on the size of the property and region.

The certificate is valid for 10 years for one property. Failure to obtain a certificate results in a fine of up to 200 pounds plus fees for completion of an energy assessment.

If your property is already let, you would not require an EPC until it is rented to a new customer.

The UK letting market is booming

A steep decline in the number of house sales is helping the UK’s letting market to flourish incredibly, as revealed in the latest survey by the Royal Institution of Chartered Surveyors (Rics).

New instructions to let, which are the major indicators of supply, have increased at the fastest rate, never witnessed in Rics history, in spite of a significant drop in buy-to-let mortgages during 2008

Rics spokesperson James Scott-Lee while commenting on survey findings remarked that lettings market was booming as many vendors were renting their property while the sales continued to drop. He said that rising rents and good returns on rental property investments were attracting landlords towards letting option.

Rics believed that people could make more money in the UK market if they opted to become landlords. The survey pointed out that 43% of chartered surveyors noted rise in landlord instructions in the second quarter of the current year.

Rics survey also revealed that many landlords were now desisting from selling their property after the expiry of tenancy agreement. The number of such landlords fell to 2.1, the lowest figure on Rics record till date.

With cash strapped people finding it difficult to get mortgages for purchase of homes and rushing for rental accommodations, landlords are blessed with very good revenue earning option to survive in financial crises.

British Retail Consortium urges easing of lease conditions and commercial rent

The British Retail Consortium and a group of retailers want commercial landlords to permit monthly rental payments instead of quarterly to aid cash flow.

Retailers claimed that quarterly payments cost extra millions of pounds every year and have insisted that it affected service charges and periods of lease too.

The practice of quarterly rental payments is centuries old, but retailers complained that facility of monthly rentals offered to the companies in financial crises was putting retailers at a disadvantage.

Hermes Pension Funds, with 1,800 shops, is inclined to replace current lease terms with more flexible conditions and monthly payment facility.

All the landlords would have to address the issue urgently since it would provide great financial relief to retailers at a time when they were faced with rising rates, utility bills and service charges much above inflation while shop prices were tumbling down.

If the proposal to replace quarterly rentals with monthly payments was accepted, cash-flow pressure on small retailers, who had been struggling with business downturn, would ease to some extent. By adopting fairer rent practices landlords would help themselves and boost sagging morale of the retailers.

The retailers were holding negotiations with the British Property Federation in order to resolve the issue amicably.

Downturn prompts Britons to invest in overseas property

Disappointed with the downturn in the UK property market Britons are seriously considering investment in property overseas.

The Cater Allen Private Bank’s research revealed that more than 3 million people in the UK were likely to purchase overseas property in the next 2 years. 42% of respondents were interested in making a purchase for investment rather than for better lifestyle. 17% of respondents from the group were aged 45 years, while 10% aged between 18 and 34.

In the younger age group, 60% showed an interest in buying overseas property solely for investment. Countries such as France, Spain and even Bulgarian property were proving popular.

It was revealing to note that 2.3m Britons already owned property overseas and 500,000 homes were purchased purely as investments. The percentage of overseas property buyers was highest amongst Londoners, with 10% of its residents owning property abroad.

The survey findings also revealed that majority of British home owners were visiting their property twice or thrice in a year, while Londoners avoided making more trips and made number of trips much below the overall average.

The buyers of overseas property were being advised by Cater Allen’s marketing manager, Sally Watts, to deal through a bank which did not charge penalties to investors for operating their finances in two different countries.