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Will green mortgages encourage landlords to improve energy efficiency?

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Landlords could get preferential treatment when applying for mortgages if their properties are energy efficient, as lenders begin to launch new green products to the market.  

This week, Paragon Bank launched a new range of buy-to-let mortgages which offer lower-deposit options to landlords whose properties have an Energy Performance Certificate rating between A and C.

It is offering mortgages with 20 per cent deposits to portfolio landlords who fit in to this bracket – less than the 25 per cent minimum that those with less energy efficient properties must put down.

Going green: Landlords who upgrade their properties to make them more energy efficient are being offered mortgage incentives, including lower fees and deposits

Going green: Landlords who upgrade their properties to make them more energy efficient are being offered mortgage incentives, including lower fees and deposits 

The five-year fixed rate is 3.99 per cent for a self-contained property and 4.19 per cent for an HMO, the latter of which is market-leading. 

Both are fee-free and come with £350 cashback, and they are available for both purchase and remortgage.

Paragon, a specialist lender, said it wanted to encourage landlords to invest in greener homes and increase the proportion of A-C rated properties in the market.

‘Lenders are offering these products to show that they are supporting environmental concerns,’ says David Longhurst, director at broker Connaught Private Finance.

‘With developers also now working to build greener houses it is only natural that they would then follow suit.’

So is the new loan offering enough of a money-saving incentive?  

Landlords with self-contained properties would probably be able to access an equivalent non-green labelled product with a better rate, but Paragon’s fee-free offer could be enticing. 

‘The equivalent non-green labelled product would cost less, around 3.5 per cent,’ says Mark Harris, chief executive of mortgage broker SPF Private Clients. 

‘But the Paragon rate benefits from no product fee and a free valuation, whereas alternatives could have arrangements fees of between £1,000 and 2 per cent.’ 

The cost of carrying out renovations to improve a home's energy efficiency means that, even with mortgage incentives, costs might not stack up for landlords

The cost of carrying out renovations to improve a home’s energy efficiency means that, even with mortgage incentives, costs might not stack up for landlords 

Under Government proposals, homes in the private rented sector will need a minimum EPC rating of C for new tenancies by 2025, and all homes in the sector will require that rating by 2028. 

The number of green products on the market is growing as landlords rush to get up to speed. 

Foundation Home Loans has launched a Green Reward Remortgage, which has a higher minimum deposit requirement of 25 per cent. It has a five-year fixed rate of 3.75 per cent, a and is available whether the property is held in a personal name or via a limited company.

It has a 0.75 per cent arrangement fee, which is lower than the lenders’ usual charge, and offers £750 cash back up to a loan size of £1m. 

Like the Paragon mortgages, it is also available exclusively to landlords with properties that have EPC ratings from A to C. 

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Paragon also launched a Green Further Advance product in February, which is designed to help landlords carry out upgrades to properties with EPC ratings of D or lower. 

However, landlords must have been accepted for a Government Green Homes Grant in order to apply – and that scheme has now been axed.

Richard Rowntree, Paragon Bank’s managing director of mortgages, says: ‘Landlords have made great strides in adding more energy efficient homes to the private rented sector – or upgrading properties to C or above standard – over the past decade. 

‘However, more needs to be done as the Government moves towards its net zero carbon target by 2050 and landlords have a key role to play in that.

‘Our new range of products at 80 per cent loan-to-value for homes with an energy rating of C or above will be an incentive for landlords to add energy efficient homes to the sector, benefiting tenants through lower energy bills and the environment through reduced consumption.’

Lenders’ motives may not be wholly altruistic, however, as there are signs that the Government could start to put pressure on mortgage companies to improve the energy efficiency of the homes they lend on.

Mortgage lenders may soon be required to track and annually disclose the average Energy Performance Certificate rating of the properties they lend against.

Landlords have been told that their lets must have an EPC rating of at least C by 2028. Older properties will be most in need of improvements to get them up to that grade

Landlords have been told that their lets must have an EPC rating of at least C by 2028. Older properties will be most in need of improvements to get them up to that grade 

The Government could then use this information to publish ‘lender league tables’ based on the average EPC ratings within their portfolios.   

If more lenders start to offer incentives to landlords with better EPC ratings, this could lead to reduced rates in future. 

There are currently about 29 million homes in the UK, of which 19 million have an EPC lower than C, according to the Government’s Climate Change Committee.  

Fitting loft, under floor or cavity wall insulation; upgrading to double or triple glazed windows; draught proofing and hot water tank insulation are just some examples of improvements that can boost an EPC rating.

Lenders have already offered incentives to home buyers with energy efficient properties for some time, and brokers say that this could be replicated in the buy-to-let sphere.  

‘A number of lenders in the owner-occupier world already offer more keenly-priced mortgage rates for greener or more efficient EPC-rated properties,’ says Harris.

‘It was only a matter of time before this was replicated in the buy-to-let sector.

‘Green finance and green mortgages have been rising up the agenda for the past few years, and we expect this to increasingly be the case.’

Upgrading their properties specifically to get a better mortgage deal might not always make financial sense for landlords, however. 

Matt Coulson, director at broker Heron Financial, says: ‘Existing property owners could invest in improved insulation or new windows, but the overall financial gains are small, in terms of securing a more favourable mortgage rate.

‘The real gain here is that all of these changes and incentives add up to making a difference to the environment and our move towards net zero.’ 

Energy efficiency for its own sake is something that many landlords may struggle to get on board with.  

Jeremy Leaf, North London estate agent, says both landlords and tenants currently have ‘insufficient regard’ for energy efficiency. 

The Climate Change Committee is proposing all UK homes reach an EPC of band C by 2028 in order to help the Government meet its net zero carbon target by 2050

The Climate Change Committee is proposing all UK homes reach an EPC of band C by 2028 in order to help the Government meet its net zero carbon target by 2050

‘It is only when utility charges are higher, for example, that people notice and are likely to change their behaviour,’ he says. 

According to the Department for Business, Energy and Industrial Strategy, the average energy running costs for a home with an EPC rating of C in England are around £300 cheaper than for a band D home, and £740 less than for a band E home. 

Tax incentives are another way that landlords could potentially be brought on board with the green agenda. 

‘In future, landlords will have access to lower rates and fees which will help increase the profitability of the property,’ says Longhurst. 

‘At the same time, the tax regime regarding maintenance versus improvements needs to be reviewed to encourage landlords to do more.’

Although access to better mortgages, the threat of higher bills and tax changes can all sweeten the deal, many landlords are likely to be incentivised most by the potential penalties if they do not upgrade their properties. 

The requirement to be at EPC grade C by 2028 is drawing closer, and those with older or less efficient properties need to be prepared.  

Mortgage lenders going green 

Green mortgages for landlords may only just be getting started, but they have been on the table for homeowners for some time. 

One in five lenders now has a mortgage in their range that offers lower rates for those with certain EPC ratings, according to the Intermediary Mortgage Lenders Association. 

A further 21 per cent offer mortgages with other financial incentives that encourage borrowers to improve their home’s energy efficiency.

NatWest has launched a green mortgage which offers a discounted interest rate to customers buying a home with an energy efficiency rating of A or B. The discount is usually 0.05 per cent. 

The bank is aiming for half of its mortgage book to have an EPC C rating or above within the next decade. 

Barclays also has a green mortgage offering, which gives buyers a 0.1 per cent discount on their interest rate if they buy a new build property with an EPC rating of A or B. The mortgage must be less than £500,000.  

Other lenders have taken a different approach. Kensington, for example, has launched a green mortgage which pays £1,000 cashback retrospectively to borrowers who make energy efficiency improvements.

In order to qualify for cashback through the eKo mortgage, customers must improve their home’s energy efficiency rating by 10 points based on the standard scoring system used by assessors. The changes must be made within the first year of completion.

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Leinster’s accuracy proves key as they see off Munster in demolition derby

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Leinster 35 Munster 25

A breathtaking and, it has to be said, physically punishing game, which ebbed and flowed from first to last, ended with Leinster getting more than they needed and Munster coming up short of their targets. Well, to a point.

Munster went into the last game requiring at least two match points for a home quarter-final and a bonus point for the additional carrot of a potential home semi-final.

In the end, they came up with zero, which was perhaps preferable in that it earned them an away quarter-final against Ulster rather than against the Bulls. Even so, the winners of that Irish derby in a fortnight will be away in the semi-finals against the Stormers or Edinburgh.

In the other half of the draw Leinster will host Glasgow in the quarter-finals, and the winners of that tie will have home advantage in the semi-finals.

The mix of requirements made for a thrilling game. Leinster were ultimately the more accurate and pacier side, epitomised by the jet-heeled Jordan Larmour, who made everyone else look like they were being towed and his counterattacking and running led to two of Leinster’s four tries. It was a timely reminder of his abilities, and might well earn him a place on the bench in the Champions Cup final against La Rochelle, who themselves welcomed back Will Skelton off the bench against Stade Francais on Saturday.

Munster’s game didn’t lack for ambition at all, and their similar mix featured classy performances by Thomas Ahern, Alex Kendellen, Jack O’Donoghue and Conor Murray. But they weren’t as accurate or quite as pacey.

This hungry Leinster mix of young and experienced were not in a remotely charitable mood, and shot out of the traps. Harry Byrne’s perfect kick-off was reclaimed by the recalled Ryan Baird and inside 80 seconds Leinster had scored without Munster touching the ball.

Generating trademark quick ball, with Baird making one big carry and Scott Penny a couple, before Ciarán Frawley used an advantage to crosskick perfectly for Penny to gather and use his footwork to step Joey Carbery and finish in the corner.

Harry Byrne didn’t land the difficult conversion, but added a penalty before offloads by Kendellen and Ahern and a couple of nicely weighted grubbers to the edges by Murray and Carbery earned an attacking lineout. The first scrap followed too. Yep, derby on.

Attacking wide and through phases, Munster used an advantage when Carbery pulled the ball back as Keith Earls worked across from his wing and flung a peach of a left-hander for O’Donoghue to take Cormac Foley’s tackle and finish well in the corner.

Leinster’s Rory O’Loughlin on his way to scoring a try despite Keynan Knox and Mike Haley of Munster during the United Rugby Championship match at the Aviva Stadium. Photograph: Laszlo Geczo/Inpho
Leinster’s Rory O’Loughlin on his way to scoring a try despite Keynan Knox and Mike Haley of Munster during the United Rugby Championship match at the Aviva Stadium. Photograph: Laszlo Geczo/Inpho

Next, after Frawley’s spillage, the recalled Andrew Conway chased Murray’s perfectly weighted kick to prevent Larmour gathering, Niall Scannell’s gallop earning another attacking lineout.

Again Munster engineered another free play, and after a strong carry by Kendellen from Murray’s pass behind his back, Mike Haley was sharply on hand to pick up and dive over under the posts.

The force was with Munster, all the more so after Conway cleanly reclaimed another box kick by Murray. But when Kendellen kicked through Larmour beat the flanker’s follow-up tackle and left a trail of four more forwards in his wake before being tackled by Murray. From the recycle, Jamie Osborne stepped and Frawley took a superb line on to his short pass for a clean break and had Foley in support. The 22-year-old showed the quickness from his formative years as a centre with St Gerard’s to complete his first Leinster try on his home debut, and some try too.

The game’s first scrums provided an almost welcome breather. Frawley, after his two sumptuous try assists, had to depart for one of several failed HIAs in the game, and didn’t return.

The lively Earls then countered with Haley, Carbery and Kendellen before Rob Russell’s deliberate knock-on prevented the ball reaching three unmarked players and earning him a yellow card. But Baird spoiled the Munster lineout to protect his side’s 15-12 lead until the interval.

But on the resumption Munster struck. Haley chased his own kick, preventing Osborne from gathering cleanly and Murray was sharply on to the loose ball to skip away from Foley’s tackle and score.

Harry Byrne brought it back to a one-point game after Foley’s high tackle on Josh Murphy, and although Munster were clearly now mindful of the chance for a fourth try when going to the corner, before accepting a tap over penalty to push them four points ahead.

Typical of this match, back came Leinster. First Foley executed a 50:22 and despite just changing their frontrow the maul was gathering speed when it collapsed and Frank Murphy adjudged it a penalty try and sinbinned Niall Scannell.

After Max Deegan’s covering tackle on the ever dangerous Chris Farrell into touch, a lovely launch play and a flatish pass by Foley for Joe McCarthy’s carry over the gainline, was the prelude to Leinster reloading right and another slaloming run by Larmour. An offload by McCarty and fine pass by Deegan created the space for Rory O’Loughlin to use a two-on-two and a mismatch with the covering Kenyan Knox to score.

Suddenly it was 32-22 to Leinster.

A spellbinding spell of offloading featuring Murray, Ahern, O’Donoghue and Kendellen ended with Earls finishing off O’Donoghue’s offload, but Murphy adjudged it forward. Instead, Munster had to opt for another Carbery penalty to complete the first task of getting to within one score before chasing a fourth try.

They became over exuberant and conceded penalties, and although Adam Byrne was brilliantly denied by Carbery and Haley, Harry Byrne’s penalty put them 10 ahead, and more relevantly left Munster without anything from the game and looking at a quarter-final away to Ulster.

They had eight minutes or so to do it. They conjured one punishing phased attack, Carbery’s one-handed pick-up and Murray deliberately knocking on with a penalty advantage and then quickly were two of the highlights, but when Carbery prematurely went wide with a looped pass to Jack Daly he was tackled into touch by Osborne.

And that was effectively that.

SCORING SEQUENCE – 2 mins: Penny try 5-0; 9: Byrne pen 8-0; 12: O’Donoghue try 8-5; 17: Haley try, Carbery con 8-12; 23: Foley try, Byrne con 15-12; (half-time 15-12); 41: Murray try, Carbery con 15-19; 46: Byrne pen 18-19; 49: mins Carbery pen 18-22; 51: penalty try 25-22; 54: O’Loughlin try, Byrne con 32-22; 61: Carbery pen 32-25; 71: Byrne pen 35-25.

LEINSTER: Jordan Larmour; Rob Russell, Jamie Osborne, Ciarán Frawley, Rory O’Loughlin; Harry Byrne, Cormac Foley; Ed Byrne (capt), Seán Cronin, Thomas Clarkson; Joe McCarthy, Josh Murphy; Ryan Baird, Scott Penny, Max Deegan.

Replacements: Adam Byrne for Frawley (27 mins), John McKee for Cronin, Peter Dooley for Byrne, Cian Healy for Clarkson (all 49), Devin Toner for J Murphy (55), Ben Murphy for Foley (58), Alex Soroka for McCarthy (66), David Hawkshaw for H Byrne (76).

Sinbinned: Russell (37-47 mins).

MUNSTER: Mike Haley; Andrew Conway, Chris Farrell, Dan Goggin, Keith Earls; Joey Carbery, Conor Murray; Josh Wycherley, Niall Scannell, John Ryan; Jean Kleyn, Thomas Ahern; Fineen Wycherley, Alex Kendellen, Jack O’Donoghue (capt).

Replacements: Jason Jenkins for Kleyn (49 mins), Keynan Knox for Ryan (54), Jeremy Loughman for J Wycherley, Rory Scannell for Goggin (both 55), Diarmuid Barron for Kendellen (58-61), for Scannell (61), Jack Daly for Ahern, Ben Healy for Carbery (both 64), N Scannell for Kendellen (65), Ahern for Daly, Patrick Patterson for Murray (both 76).

Sinbinned: N Scannell (51-61 mins).

Referee: Frank Murphy (IRFU).

URC quarter-finals (Fri, Jun 3rd & Sat, Jun 4th)
1 Leinster v Glasgow Warriors
2 DHL Stormers v Edinburgh
3 Ulster v Munster
4 Vodacom Bulls v Cell C Sharks
 
Semi-finals (Fri, June 10th and Sat Jun 11th)
Leinster or Glasgow v Bulls or Sharks
Stormers or Edinburgh v Ulster or Munster.
 
Shield winners 2021/22:
Irish Shield:
Leinster
South African Shield: DHL Stormers
Welsh Shield: Ospreys
Scottish & Italian Shield: Edinburgh
 

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Aparto debuts in Spain

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Aparto has unveiled its first student residence in Spain to open in September 2022. Aparto Barcelona Pallars, owned by Commerz Real, is located in the 22@, the city’s innovation district, and accommodates 743 beds covering 26,000m². The cutting-edge facilities at aparto Barcelona Pallars include an external circa 45-metre length infinity pool, a 900 square metre rooftop terrace, 2,500m² of gardens including the Butterfly Garden (named because of the type of plants that attract butterflies), the Smell Garden (due to the mixture of aromatic plants), 1,400m² of amenity space including a gym with a weight, cardio, and yoga studios, two cinema rooms, leisure areas, and a bar offering both food and drink services.

 

In addition, a central feature of aparto’s offering is its first-class experience with a focus on the arts including an initiative in which street artists will design some of the paintings on the building, and a mental health programme available to all students all year around, strengthened by aparto employees receiving mental health training to identify anyone who may need help. 

 

aparto Barcelona Pallars has been designed by the Catalonian architecture studio Battle i Roig, a pioneer in landscape architecture, interweaving structures with natural spaces like gardens. Upon construction completion, the building will receive the LEED Gold and WELL Platinum Certifications for sustainability. 

 

aparto offers students a unique safe study experience and flexible model offering medium and long-term stays, from a few months to a full year, with all-inclusive rates including cleaning, Wi-Fi connection, linen services, and some additional features related to sports and wellness sessions, cocktail and cooking classes, and a series of entertainment evenings including movie nights, sports matches and tournaments. Aparto’s focus is to create places where students feel at home living within a strong community.

  

Tom Rix, director of operations at aparto, UK, commented: “With Aparto Barcelona Pallars, Hines is introducing first-class student housing in Spain. Pallars mirrors what today’s students want in terms of facilities, amenities, community engagement, and wellbeing programmes. We have already successfully demonstrated that this innovative model is in high demand in Italy, Ireland, and the UK and we anticipate the same success here in Spain and can’t wait to welcome students to Barcelona.”

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Crossrail house price boom: Reading, Maidenhead and Slough set to become property hotspots

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Crossrail may be billions of pounds over budget and three-and-a-half years late but it’s finally ready to roll.

This extraordinary feat of engineering is due to be put into service on Tuesday, when it will adopt its correct title of the Elizabeth Line. 

The Queen made a surprise visit to Paddington station this week and officially opened the line.

On the line: The Thames flows through Maidenhead, which will now enjoy a direct link to Central London thanks to its new Crossrail station

On the line: The Thames flows through Maidenhead, which will now enjoy a direct link to Central London thanks to its new Crossrail station

Linking Shenfield and Abbey Wood in the east with Heathrow and Reading to the west of the capital, it will bind together existing commuter railways, accelerating cross-city travel and relieving overcrowding on the London Underground — particularly the often hellish Central Line.

Commuters’ journey times will be slashed; Reading to London Liverpool Street, for example, will take under an hour.

When fully operational it will increase London’s rail capacity by 10 per cent, making it the largest single expansion of the city’s transport network in more than 70 years.

There are still a few glitches to be ironed out. Initially passengers travelling from Reading in the west to Abbey Wood and beyond will have to change at Paddington or Liverpool Street mainline stations. 

Also Bond Street is three months behind schedule. Trains will not call there until later in the year. Yet these delays pale into insignificance when you consider how the Elizabeth Line will transform rail travel in the capital.

Cross town: The Elizabeth line will run east to west across London, starting in Berkshire and ending in Essex

Cross town: The Elizabeth line will run east to west across London, starting in Berkshire and ending in Essex

The new station at Paddington, for example, is the size of three Wembley football pitches, with natural light as far as the platform entry from a nearly 400ft-long glass canopy.

More than £1 billion has been spent on upgrading 31 existing stations and tracks. Spacious tunnels will lead to airy 600 ft platforms, with glass screens at the edge of the tracks, making it impossible to fall under a train. 

Step-free access from street to train will make the service accessible to wheelchairs. 

The nine-car, air-conditioned trains will have colourful bench seats and open interiors with full-width walk-through connections between cars. It will be a world away from today’s cramped, cluttered carriages.

Few engineering projects change the way we live but The Elizabeth Line promises to do just that. People are already flocking to the new stations.

Research from Savills last year found that, over the past five years, homes within 0.6 mile of about half of the stations on the line have increased in price by 25 per cent or more.

It follows that when the sleek and airy new trains come into service, delivering people to their workplaces in double quick time, we can expect a migration to the west of London.

Here are the hotspots:

Reading revival

Outlay: More than £1bn has been spent on upgrading 31 existing stations and tracks

Outlay: More than £1bn has been spent on upgrading 31 existing stations and tracks

Not so long ago Reading was best known for its brewery and its biscuit factory — not any more. 

International companies, including Amazon UK, Virgin Media and KPMG have moved there and with reasonably priced homes, compared to London, the town is already popular with commuters.

‘I recently dealt with a young woman who sold her 750 sq ft flat in London for £600,000 and bought a 1,750 ft duplex in Reading for £650,000,’ says James Hathaway, of Winkworth estate agents.

The town has lots of green space, riverside walks, the Grade II-listed Thames Lido and great shopping, notably in Broad Street and the Oracle centre. The average price of a home sold in Reading was £384,000 last year.

Compare that to the £512,000 average price in, say, East London and you will see why an exodus from the capital is forecast when the Elizabeth Line makes commuting a doddle.

Maidenhead marches on

This Berkshire town is keen to attract the City bankers who had previously been put off living there by having to trek across the capital’s underground system to get to work.

‘The Elizabeth Line changes all that and buyer enquiries have already started booming,’ says Dawn Carritt at Jackson-Stops estate agents.

‘The prospect of living near the river in Maidenhead or in nearby villages such as Sonning and Bray is appealing.’

Maidenhead (with Theresa May as its MP) is on the cusp of a revival. Its 1960s shopping centre is to be transformed into The Nicholson Quarter, a swish mixed-use centre.

The area by the river is being developed and trendy cocktail bars and restaurants such as Coppa Club are thriving — a sure sign of a town on the up.

Slough expansion

Ricky Gervais did Slough no favours when he set The Office there. Yet the town has a lot going for it. It is well located for travel, nestling between the M4 and the M40 and within easy reach of the M25 and Heathrow airport.

First-time buyer portal Share to Buy claims that Slough has been one of the UK’s top ten property hotspots over the past decade with a 73 per cent increase in house prices. 

The Berkeley Group is redeveloping the former Horlicks factory and site to create 1,300 homes.

A small flat sells for £150,000 and a three-bed terrace house for £350,000. The centre is being improved and with the coming of the Elizabeth Line, things can only get better.

On the market… the hotspots 

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