Fleet Mortgages has introduced a new, limited edition product feature which will reward landlord borrowers with a £1,000 cashback payment if they improve the Energy Performance Certificate (EPC) level of the property to a C or above during the course of the initial fixed-rate period.
The cashback is available on Fleet’s five and seven-year fixed-rate products, excluding Green options, which complete from 1 July 2023.
The lender believes it is the first in the specialist buy-to-let mortgage market to offer such a feature and is hoping it will incentivise landlords to carry out the works required in order to improve their property’s EPC if it is currently below C.
To be eligible for the cashback, advisers or the landlord borrower must inform Fleet if the EPC level of the property has been improved, and this must be documented on the property’s EPC.
Fleet said the new product feature was designed to promote energy efficiency improvement in rental properties, and to help landlords achieve a likely requirement of minimum EPC levels in the future. The lender also said the initiative was part of its own push to support the Government’s targets on achieving net zero carbon emissions by 2050.
At present, the industry anticipates the Government may introduce measures that could mean all private rental sector property must have an EPC level of C or above by 2028.
Fleet will also continue to offer Green five-year fixes and tracker mortgage products to those landlord borrowers who already have properties rated EPC Level C and above. These come with rates 10 basis points below the core offering.
Steve Cox, chief commercial officer at Fleet Mortgages, said: “We’ve been very vocal in the past that having a Green product range, rewarding those who have properties already at EPC level C and above, was absolutely right. But this felt like just the first step for us.
“It’s therefore very pleasing to be able to announce this next step, which you might say focuses on the real matter at hand, supporting landlord borrowers as they seek to improve the EPC of those properties not yet at this level.
“This cashback feature is designed to help motivate landlords to make the necessary improvements to their properties, so they can contribute to a greener future for everyone, and also importantly get ‘money back’ against the costs of completing those works.
“At Fleet we are absolutely committed to supporting the UK’s transition to a more sustainable future, and to improving the energy efficiency of the country’s private rental sector properties, with the obvious benefits this will provide, particularly for tenants.
“Advisers will of course be central to this, in terms of outlining the product feature, the options it gives landlords, plus either they or the landlord borrower can inform Fleet as and when the EPC improvement is made, so we can then deliver the cashback.”
