A quarter (25 per cent) of landlords are prioritising energy efficiency when adding a property to their investment portfolio, research from The Mortgage Lender has revealed.
These findings come despite the government’s rollback on energy efficiency targets for buy to let landlords last year which would have required them to ensure their rental properties had a minimum EPC rating of C.
TML head of sales for midlands, south and specialist distribution, Chris Kirby, said it is “encouraging” to see that BTL landlords are continuing to adapt and shift their priorities.
“It shows just how committed many landlords are to staying ahead of the curve and anticipating tenant expectations,” Kirby added.
“As lenders, we similarly want to offer greater flexibility in order to best support BTL landlords, whether this comes in the form of extending our product range or working with brokers to offer the best options for their customer base.”
However, energy efficiency was not the only priority identified by landlords with 48 per cent of respondents prioritising price.
Monetary aspects were also mentioned by other respondents with 29 per cent prioritising rent yield and 23 per cent prioritising long-term investment potential.
This was balanced with other aspects such as an attractive location (29 per cent), good council tax banding (17 per cent), the property being move-in ready (16 per cent), and inside layout (16 per cent).
Additionally, the research asked how BTL landlords would buy their next rental property, with 24 per cent saying that they would buy as an individual with a mortgage and a further 22 per cent would buy as an individual with cash.
In contrast, 10 per cent said they would buy their next property as a limited company with a mortgage, while 11 per cent plan to buy as a joint investor with a mortgage.
In a similar vein, mortgages continue to be a key priority for landlords amid a tumultuous year for rates.
As such, three out of four (77 per cent) of landlords said that the rate of the mortgage available was an important factor for them when buying a property with a mortgage.
Other factors landlords felt to be important included wanting greater fluidity from lenders such as in the amount they could borrow, something which was mentioned by 76 per cent.
This was followed by the discount on fees, mentioned by 72 per cent, flexibility on criteria, 72 per cent, and the support offered by the lender, 70 per cent.
tom.dunstan@ft.com
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