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Buy-to-let mortgages on rise – but landlords would rather quit than meet new eco rules

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There are more buy-to-let mortgage deals available now than at any point during the pandemic, including ‘green’ deals – but some landlords are considering leaving the market due to incoming energy efficiency rules.

The number of deals on the market has reached more than 2,700, according to Moneyfacts, the highest since March 2020 and an increase of nearly 1,000 annually.

It is also 365 more than were available in July 2019, ahead of the pandemic. 

Waste of energy? Availability of buy-to-let mortgages is improving, but some landlords are reticent to take advantage because of upcoming regulations around EPC ratings

Waste of energy? Availability of buy-to-let mortgages is improving, but some landlords are reticent to take advantage because of upcoming regulations around EPC ratings

As well as launching more products in general, lenders are increasingly offering mortgages that reward landlords with energy-efficient properties, as the Government moves to make less energy efficient homes effectively difficult to rent out within the next 15 years. 

But despite these incentives, some landlords have told This is Money they would rather quit the market than spend money bringing their properties up to the required standard.  

The Mortgage Works – the landlord arm of Nationwide and one of the UK’s biggest buy-to-let lenders – has re-introduced loans with 20 per cent deposits after withdrawing them at the beginning of the pandemic. 

They are available for purchase and remortgage with two-year fixed rates starting from 2.49 per cent with a 2 per cent fee and five-year fixed rates starting from 2.99 per cent with a 2 per cent fee.

However, the one key difference from the previously available products is that they are now only available on properties that have an EPC energy efficiency rating of C or above.

Just 2 per cent of homes currently make the A and B grades, while around 85 per cent are either C or D, according to the latest English Housing Survey. Around 13 per cent, more than 14 million, are rated E, F or G. 

Improving homes by adding better insulation or replacing gas boilers can cost tens of thousands of pounds – and some landlords say it is not worth it.  

For certain older homes, it might not even be possible to get up to a EPC C rating. 

Energy efficiency rules ‘by far the biggest threat’ to landlords 

Despite the mortgage incentives on offer, some landlords told This is Money that they were not planning to bring their properties up to scratch and that instead they wanted to quit buy-to-let. 

Most wanted to be anonymous because they did not want their tenants to find out that they wanted to sell before they had finalised their plans. 

One portfolio landlords told us: ‘Of all the punitive recent legislation and anti-landlord changes, nothing comes close to the impending minimum C rating. 

‘It is this alone that will cause me to sell my buy-to-let properties, and I suspect a large number of others. 

‘My properties are old and as such will take a ridiculous amount of money to bring up to a C, even if that were possible, which I suspect it will not be.

‘It is by far the biggest threat to the buy-to-let market and it is within plain sight.’ 

TMW is the latest of many lenders to launch mortgages that are conditional on a property’s green credentials. 

Most are offering higher loan-to-values or lower fees to landlords that own properties with an EPC C or below, though there are some offering better interest rates.  

The Department for Business, Energy and Industrial Strategy is currently consulting on proposals to increase the EPC requirement to a C rating for all tenancies by 2028.

BEIS has said that mortgage lenders could play a key role in meeting the Government’s energy efficiency targets for housing, and suggested that they could be required to track and annually disclose the average Energy Performance Certificate rating of the properties they lend against. 

‘Improving would cost me £5k – and I could be forced to upgrade again’ 

 London-based landlord Peter S. told This is Money: 

‘One flat I own is a pretty Georgian one-bed in North London. All my tenants over 20 years have loved living there, as I did for seven years when younger, and I am always at hand to deal with any problems.

‘The EPC rating is now just below the standard, but to increase it to legal level, I must install gas central heating (being so small it has always been fine with Dimplex heaters). 

‘This will cost me about £5,000 to install, but all signals are gas will then be banned due to environmental costs. 

‘The constant upgrading of requirements is making my business, which has provided great safe and comfortable living for tenants over the years, simply unviable.’

In its announcement of the new deals, TMW referenced the BEIS consultation as the driver behind its decision to only offer the mortgages on homes with an EPC of C or above.

Daniel Clinton, head of The Mortgage Works, said: ‘With impending regulation on the horizon affecting minimum EPC standards across the PRS, we are taking pro-active measures through our lending proposition to support the transition.’  

This week, Paragon Bank expanded its ‘green further advance’ mortgage range, as one of several lenders to venture into this market.

Further advance mortgages allow property owners to access funds to improve their homes.  

Paragon’s new 20 per cent deposit further advances are available for landlords who have four or more mortgaged buy-to-let properties, which are rated A-C, in England and Wales.

One way of improving a home's EPC is by installing better insulation - but some landlords say making improvements isn't worth the cost and they would rather sell their properties

One way of improving a home’s EPC is by installing better insulation – but some landlords say making improvements isn’t worth the cost and they would rather sell their properties

Initial fixed rates start at 3.75 per cent and there are no fees. 

Other lenders that have offered special mortgages or incentives based on EPC ratings this year – either to landlords or owner-occupiers – include NatWest, Nationwide, Barclays, Virgin Money and Kensington Mortgages. 

Prior to that, they were relatively unheard of – but with government pressure unlikely to let up, green mortgages seem to be here to stay. 

Daniel Lee, principal broker at Hamilton Fraser Total Landlord Mortgages, said: This is clearly a condition which will become more prevalent, particularly if in the future mortgage lenders are required to track and annually disclose the average EPC rating of the properties they lend against. 

‘Landlords should take note of this and be looking at ways to make energy efficient improvements to their rental properties, not least so they can achieve the best mortgages rates, but also to protect the saleability and value of their investment.’ 

However, for many, they would rather sell up and leave the market altogether. 

‘I’ll be a holiday let owner instead’ 

Another landlord, who again wanted to be anonymous for fear of unnecessarily worrying his tenants, said: 

‘I am situated in Wales and have a mixture of commercial and residential properties.

‘I have already sold one house last year and will be selling another when it becomes vacant.

‘My reasons for wanting to get out are many, but over regulation in the sector is probably the main one.

The EPC rating rising to ‘C’ is going to hit many landlords hard, because of the ages of some of the properties, it is not economical (or even possible) to bring them up to the required standard, without having to spend considerable sums of money.

‘I am 65 now and I don’t want my benefactors to have a large inheritance tax bill to pay.

‘I have a farm in Monmouthshire with a listed barn and I am going to rent this out for holiday lets, as there is much less hassle and it is a lot more lucrative.’ 

What is happening to buy-to-let rates?

The average two and five-year fixed rates for buy-to-let mortgages are sitting at 2.98 per cent and 3.28 per cent, according to Moneyfacts.

While they have decreased compared to 2019, these are 0.37 per cent and 0.31 per cent higher respectively than a year ago.

Eleanor Williams from Moneyfacts said this was due to lender caution amid the pandemic. 

She added: ‘What is positive is the fact that the overall two-year fixed rate is lower now than in June 2019 – which means those coming off a two-year fixed deal may still find a better deal, depending on how much they have in equity and their circumstances.’

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Foley to bring school reopening plan to Cabinet on Tuesday

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Minister for Education Norma Foley says she has every confidence schools will reopen fully from late August and early September.

Ms Foley said there was ongoing engagement between her department and public health officials on the matter but all schools were set to reopen.

Strong mitigation measures would be in place in schools to ensure that they would continue to be controlled environments, she told RTÉ radio’s Today with Claire Byrne show on Monday.

Covid-19 infection rates among children were at their highest when children were not at school and public health experts had pointed out “on a consistent basis to schools being a very significantly controlled environment”.

The safe operation of the Leaving Certificate exams and enhanced summer camps indicated that the safe operation of education could be maintained, she said.

A plan would be put in place to allow schools to “draw down” CO2 monitors and the Minister said she was confident there would be enough monitors for all schools by the start of the new school year.

In relation to Covid-19 vaccines for children, Ms Foley said the “expertise” lay with the National Immunisation Advisory Committee (NIAC) from which her department would take guidance.

“I have received confirmation that the 16 to 18-year-old cohort should be in a position for online registration in the coming days, and I have been advised that the 15-year-olds cohort are still being considered by NIAC and there has been no definitive timeline given,” she added.

Ms Foley will bring a plan to Cabinet on Tuesday outlining enhanced public information campaigns, the outcome of antigen testing pilots, and the purchase of C02 monitors to assist in ventilating classrooms.

Capacity limits on school transport services will also remain in place.

Government sources were adamant on Sunday that second-level education would resume in the autumn, despite concerns among public-health officials that the wave could grow following the reopening of indoor dining today, before peaking in September.

“Schools will reopen,” a senior Coalition source said.

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Over 40 complaints made about ‘unsuitable’ books on English curriculum

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Some books being studied by Junior Cert and Leaving Cert English students feature “disturbing and sick content” and material that is “clearly unsuitable for minors”, complainants have told the Department of Education.

The department has received more than 40 complaints on the issue in recent months, with one email to Minister Norma Foley describing The Handmaid’s Tale by Margaret Atwood as “nothing but sadistic, upsetting and of no moral learning or value to students”.

The acclaimed dystopian novel is based in a patriarchal totalitarian state where women, or handmaids, are forced to produce children for commanders.

One “concerned parent” said they were “perturbed” that their teenager was studying the novel Room by Irish author Emma Donoghue.

‘Questionable’

They said many of the topics in the book were “questionable” and that greater consideration should have been given before the book was “forced upon sensitive people in this day and age”. The Booker-shortlisted story is told from the perspective of a young boy held captive in a small room with his mother.

The emails, released to The Irish Times under the Freedom of Information Act, were from parents, one of whom said they were “appealing to and begging” the department to change the curriculum.

One parent expressed “shock and concern” about the prescribed reading lists, citing a perceived “lack of vigilance regarding the age appropriateness” of some books. “The material is offensive, abhorrent and clearly unsuitable for minors,” they said.

The curriculum could “only be described as the sexualisation and desensitising of our children… there needs to be an investigation into this whole sordid affair”, another complaint said.

‘Enslaving’

One person said the book list was “enslaving” students to “abominable ungodly content”, while another sarcastically suggested there was “nothing to stop” Fifty Shades of Grey, the bestselling explicit erotic romance novel, being added.

Some emails were directed towards Ms Foley personally, and called for her to be fired and “held directly responsible”. The department’s response stated that the curriculum at all levels was considered to be for all learners “regardless of race, religion, socioeconomic background, gender or orientation”.

It said it was important that each book was viewed “in its entirety rather than being reduced to particular sections which may be especially controversial”, and that the texts had “strong literary pedigrees” and featured on curricula internationally.

There were also several emails sent to the department in defence of the curriculum, predominantly from students.

The text-list working groups for each subject, convened by the National Council for Curriculum and Assessment, are comprised of teachers, third-level lecturers, staff from relevant support agencies and experts in children’s and young adult literature. The curriculum did not change this year though the Minister said it would be reviewed in the coming months.


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EDEN CONFIDENTIAL: A new £10m home sweet home in the Cotswolds for Nick Candy and Holly Valance 

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You might have thought having a Chelsea pad worth more than £75 million would be enough for most property tycoons, but not for Nick Candy.

I can disclose that Candy and his pop star wife, Holly Valance, have splashed out well over £10 million on a Grade II‑listed mansion in Oxfordshire.

They will be a short drive from trendy private members’ club Soho Farmhouse, where Prince Harry courted Meghan.

That's sweet: Nick Candy and his pop star wife, Holly Valance, have splashed out well over £10 million on a Grade II‑listed mansion in Oxfordshire (pictured)

That’s sweet: Nick Candy and his pop star wife, Holly Valance, have splashed out well over £10 million on a Grade II‑listed mansion in Oxfordshire (pictured)

Holly Valance and Nick Candy attend Lisa Tchenguiz's 50th birthday party at the Troxy in 2015

Holly Valance and Nick Candy attend Lisa Tchenguiz’s 50th birthday party at the Troxy in 2015

The seven-bedroom property has a pool, stables, tennis and squash courts and its own chapel

The seven-bedroom property has a pool, stables, tennis and squash courts and its own chapel

While it is unknown how much the couple paid, records show it was bought for £8m in 2012

While it is unknown how much the couple paid, records show it was bought for £8m in 2012

The house is a short drive from trendy private members' club Soho Farmhouse

The house is a short drive from trendy private members’ club Soho Farmhouse

Candy and his pop star wife, Holly Valance, have splashed out well over £10 million on the property

Candy and his pop star wife, Holly Valance, have splashed out well over £10 million on the property

The seven-bedroom property has a pool, stables, tennis and squash courts

The seven-bedroom property has a pool, stables, tennis and squash courts

Candy, 48, declines to say how much they paid, but the house was bought by the previous owners for £8 million in 2012

Candy, 48, declines to say how much they paid, but the house was bought by the previous owners for £8 million in 2012

Prices have rocketed in the area, where locals include Kate Moss and JCB tycoon Lord Bamford and his wife Carole

Prices have rocketed in the area, where locals include Kate Moss and JCB tycoon Lord Bamford and his wife Carole

Candy, who has two daughters with his wife, adds: 'We're very immersed in our quiet country life at weekends'

Candy, who has two daughters with his wife, adds: ‘We’re very immersed in our quiet country life at weekends’

‘We have been looking for years to get something in the Cotswolds for the family, and finally, a year ago, we found a gorgeous family home in a wonderful village,’ Candy tells me.

The seven-bedroom property has a pool, stables, tennis and squash courts and its own chapel.

Candy, 48, declines to say how much they paid, but the house was bought by the previous owners for £8 million in 2012.

Since then, prices have rocketed in the area, where locals include Kate Moss and JCB tycoon Lord Bamford and his wife Carole, who started the Daylesford organic empire.

Candy, who has two daughters with his wife, adds: ‘We’re very immersed in our quiet country life at weekends and adore the friendly and welcoming village.’

Candy's luxury two-storey penthouse in Hyde Park has gone on sale for £175million

Candy’s luxury two-storey penthouse in Hyde Park has gone on sale for £175million

The stunning apartment is split over two levels, boasts five bedrooms, a 21m swimming pool, and measures around 18,000 sq ft - the equivalent of almost 18 average homes in England.

The stunning apartment is split over two levels, boasts five bedrooms, a 21m swimming pool, and measures around 18,000 sq ft – the equivalent of almost 18 average homes in England. 

Prolific author Alexander McCall Smith, creator of The No. 1 Ladies’ Detective Agency has been promised great things – but only after his death.

He says: ‘I was on tour in the United States and this woman came up to me with a book for signature, and she looked at me and said: ‘You know something, you’re going to be much more successful posthumously.’ ‘

The writer, 72, who has written 21 novels in the series, says. ‘She wasn’t being rude, but it was rather an odd thing to say to somebody.’

How guitar guru Beck gave Depp a silver lining 

Pictured: Johnny Depp is planning his comeback

Pictured: Johnny Depp is planning his comeback

With his acrimonious divorce from actress Amber Heard, and their bitter court room showdown in London last summer, Hollywood star Johnny Depp suffered the biggest setback of his glittering career.

Now, however, I hear he’s quietly planning his comeback — right here in Britain.

The 58-year-old star of Fantastic Beasts and Charlie And The Chocolate Factory has been taken under the wing of British rock legend Jeff Beck.

The Hi Ho Silver Lining guitarist, 77, who’s so talented he had each of his fingers insured for £700,000 in 2010, has secretly been hosting Depp at his Riverhall country estate in Wadhurst, East Sussex, where they’ve been writing and recording together in Beck’s studio. Depp is an accomplished guitarist himself.

‘They’ve been collaborating on material for Jeff’s next album,’ reveals a source close to Depp. ‘It’s been great for Johnny to get back to his first true love, which is music.

‘Jeff has been a great friend to Johnny during a very difficult time, and being away from Hollywood has been exactly what Johnny needed.

‘He wants to take a step back from everything and focus on a comeback through music.’

Eight-time Grammy Award winner Jeff, who has been called ‘one of the most influential lead guitarists in rock’ by Rolling Stone magazine, recorded a cover of John Lennon’s Isolation with Depp last year, intended to help people cope with life in lockdown.

Johnny Depp of Hollywood Vampires performs on stage at Celebrity Theatre in 2018 in Arizona

Johnny Depp of Hollywood Vampires performs on stage at Celebrity Theatre in 2018 in Arizona

In 2019 they played together at the Crossroads Music Festival in Dallas, Texas, for Eric Clapton’s charity, then did a short tour of the U.S.

Depp has previously featured on songs by Oasis, Iggy Pop, and Aerosmith, as well as on records by his ex-girlfriend, singer Vanessa Paradis, with whom he has two children. In 2015, he formed the super group, Hollywood Vampires, with Alice Cooper and Joe Perry.

‘Johnny hopes to return to films eventually,’ adds the source, ‘but it’s music first.’

Boogie-woogie pianist Jools Holland is learning to sing lullabies. The Later . . . with Jools Holland host has become a grandfather at the age of 63.

‘I am very pleased that I now have a wonderful grandson, Gabriel,’ he says. His musician daughter, Mabel Ray, 30, is the proud mum.

‘We seem to have identical hair,’ he adds of the baby. ‘He is a delightful little fellow. All thanks to the fantastic staff at Homerton University Hospital for delivering him to us.’

Queen’s Windsor gong show for late Duke’s loyal page

The Queen is making sure Prince Philip’s most steadfast former aides feel rewarded.

I hear that she invited the Duke of Edinburgh’s loyal page, William Henderson, to Windsor Castle this week to collect his gong.

His appointment as a Lieutenant of the Royal Victorian Order was announced on what would have been Philip’s 100th birthday.

Henderson was among those who took part in the funeral procession, walking behind the coffin.

Known for his sarcastic quips when required to report on the love lives of the Royal Family, waggish news anchor Simon McCoy seems to be secretly obsessed with the Windsors.

‘If I were invisible, I would go into Highgrove and stand by the phone to listen to any conversation Prince Charles might have with Harry,’ admits McCoy, who recently moved from the BBC to its new rival channel, GB News.

‘I feel desperately sorry for Charles — I really do. Family difficulties are bad enough without one of you bleating about it to the Press all the time.’

Creating a buzz with Angelina the Queen Bee 

There’s a buzz about Angelina Jolie, but it’s nothing to do with her film career.

The actress brought a touch of Hollywood glamour to the new French Apidology Observatory, in Sainte-Baume, where she presented its first graduates with their diplomas.

Angelina Jolie with children Pax, Zahara and Shiloh seen shopping at trendy KITH's in Paris, France

Angelina Jolie with children Pax, Zahara and Shiloh seen shopping at trendy KITH's in Paris, France

Angelina Jolie (pictured shopping Paris) brought a touch of Hollywood glamour to the new French Apidology Observatory where she presented its first graduates with their diplomas

Jolie, 46, who’s recently been seen out with her British ex-husband Jonny Lee Miller, was there because she’s involved in the Women for Bees project, which aims to encourage women to become beekeepers.

Clearly, there’s only one Queen Bee.

Paymaster General Penny Mordaunt, who starred on TV diving show Splash, will be demonstrating her water skills at the local pool rather than heading off to the Med this summer.

‘I’ll be staying in my constituency and spending time at my local lido,’ the MP for Portsmouth North tells me at the Westminster launch party for her book, Greater: Britain After The Storm, which she’s co-written with Chris Lewis. ‘I’ve earned that — I went to great lengths to save it.’

The forecast is hotting up with Carol’s exotic secret 

This could liven up those dull BBC meteorological reports: weather presenter Carol Kirkwood has revealed a secret skill.

‘I can belly-dance,’ whispers the former Strictly contestant.

‘It is actually quite hard, but I learned to do it when I was a student travelling in Turkey and Greece.’

The Scottish hotelier’s daughter, 59, adds: I can’t claim to be very good at it — but I do at least have the belly for it these days.’

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