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Month: July 2023

Opportunity for Landlords with rising rental yields

Posted on by Sophie Winter

According to research, UK rental yields have experienced a slight increase in the past year, despite the housing market’s volatile nature. The research analysed house prices, rent values, and yields in June 2022 and June 2023 to understand the impact of the economic environment on buy-to-let investment returns.

What are the average rental yields in the UK?

Despite the challenging period in the UK with rising mortgage rates, there is an opportunity for proactive investors due to lower house prices and increasing rent values. The latest data shows that the average yield in the UK currently stands at 5.2%, marking a 0.4% increase compared to the previous year.

Among the regions, Scotland offers the strongest yields at 5.9%, making it an attractive place for investment. Other regional hotspots include Northern Ireland (5.7%), the North West (5.5%), Yorkshire & Humber (4.9%), and London (4.7%). Scotland also leads in terms of annual yield increases, showing a rise of 0.64%. Several other regions are performing well in terms of yield growth, with London at 0.49%, Wales at 0.35%, the West Midlands at 0.34%, the North West at 0.34%, and Yorkshire & Humber at 0.34%.

The battle for a place to rent

Data commissioned by the BBC reveals that competition among renters has intensified significantly, with 20 requests to view each available property. The average number of requests to see a home has more than tripled from six in 2019, according to figures from property portal Rightmove.

Additional research shows that tenants are reportedly making offers higher than the asking rent or even arriving earlier to secure a spot at the front of the queue. From our experience we are seeing that properties are getting rented out after the initial block of viewings due to the exceptionally high demand.

Lettings Manager, Sue Barnes suggests that the market presents opportunities for investors willing to take calculated risks, and the current UK environment exemplifies this. Despite economic struggles and concerns over rising mortgage rates, buy-to-let landlords with the means to handle current mortgage deals should consider seizing opportunities when suitable properties come to market in favourable locations. She emphasises that investors should take advantage of these moments when others may be hesitant.

Looking to invest?

We have a broad selection of ideal buy-to-let investment properties available, contact our expert team today to discuss this opportunity and how we can help you.

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Are new build homes more energy efficient?

Posted on by Sophie Winter

At CR Real Estate, we possess a deep passion for promoting new build properties, and it’s our desire for our clients to share this enthusiasm when they embark on purchasing a new home. In this blog we aim to delve into the numerous energy saving advantages associated with purchasing a newly constructed property.

New build energy savings

When considering the environmental efficiency of new homes versus second-hand ones, the primary distinguishing factor is the Energy Performance Certificate (EPC). In 2022, a noteworthy 85% of newly constructed homes received an exceptional EPC rating of A or B. This represents the highest level of efficiency. In contrast, out of the entire housing stock in the UK, only 41% of homes manage to achieve an EPC rating higher than C. This stark difference highlights the significant disparity in efficiency standards between new builds and the majority of second-hand homes.

Keeping you warmer

Enhanced insulation is a fundamental factor contributing to the improved Energy Performance Certificate (EPC) ratings of new homes compared to those built several decades ago. New homes are built with higher insulation standards, which effectively retain heat and reduce the frequency and duration of central heating usage. This results in lower carbon dioxide emissions and significant energy savings. In fact, recent research suggests that buyers of new homes can potentially save an average of over £3,000* annually on energy costs.

Energy and technology

In addition to insulation and triple glazing, EPC ratings also consider the energy generation methods employed in a home. New homes are increasingly achieving favourable EPC ratings by incorporating technologies such as solar panels and air source heat pumps into entire developments. Even more modest technologies, such as the inclusion of smart thermostats, contribute to energy conservation by facilitating easier control of energy usage. Government policy is further promoting the construction of energy-efficient homes through the 2025 Future Homes Standard, which mandates insulation standards and the installation of more efficient boilers in new homes.

Don’t overlook the letters

It may be tempting to overlook the seemingly arbitrary letters associated with homes, but the practical implications of energy ratings have become increasingly apparent in the past year. Energy Performance Certificate (EPC) ratings are determined by calculating the annual carbon dioxide emissions resulting from a home’s energy usage. To illustrate, consider two standard 3-bedroom homes of identical size: one with a D rating would emit approximately 4 tonnes of CO2 per year, while the home with a B rating emits less than half of that, just under 2 tonnes of CO2. Discovering the EPC rating and corresponding CO2 emissions of your home is a simple process. Visit the government website, enter your address, and you may realize the potential savings a new build home could offer.

Final thoughts

In the past year, energy bills have emerged as a significant concern for many individuals, making cost savings a highly desirable outcome. This leads us to the question: Why consider purchasing a new build home? The answer lies in the potential for substantial savings and the opportunity to make a positive impact on the environment. Opting for a new build home allows you to save money while actively contributing to planet conservation—a truly advantageous and mutually beneficial choice. Looking for a new build home? Contact our expert land and new homes team today to discuss your property requirements and how we can help you.

*Statistics correct at time of writing, CR Real Estate can not guarantee energy savings.

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What’s happening with minimum energy efficiency standards and EPC ratings?

Posted on by Sophie Winter

In 2020, the government revealed its intentions to raise the Minimum Energy Efficiency Standards (MEES) for the Private Rented Sector. The plans specified that private rented properties would be required to achieve an Energy Performance Certificate (EPC) rating of C or higher by 2025 for new tenancies, and by 2028 for existing tenancies.

Are landlords ready for changing Minimum Energy Efficiency Standards?

Recent data indicates a gradual enhancement in the energy efficiency of properties available for rent. As the number of properties with an EPC rating of C or higher has increased by 16% since January 2019.

Meanwhile, the number of rental properties with EPC ratings D to G dipped by 11%. These figures suggest that landlords are taking steps to either improve the energy efficiency of their properties; or becoming more selective with their investment choices.

A notable 61% of landlords say that they would not consider investing in a property with a rating below C. This shift in mindset demonstrates a change in priorities and an acknowledgement of tenants’ preference for higher-rated properties.

Will the new minimum standards be included in the Decent Homes Standard?

The A Decent Homes Standard in the private rented sector consultation outlined the suggested measures to implement the Decent Homes Standard in the private rented sector.

This standard is anticipated to be implemented in conjunction with the Renters (Reform) Bill. According to the consultation proposals, one of the criteria, criterion D, requires homes to offer “a reasonable degree of thermal comfort.”

In the House of Commons Committee report on Reforming the Private Rented Sector, a recommendation was made to incorporate the Minimum Energy Efficiency Standards (MEES) into criterion D of the Decent Homes Standard. This suggestion is regarded as a simple and modest simplification of the complex regulatory framework.

Currently, the Minimum Energy Efficiency Standard is not applicable to the social housing sector. Thus there is no necessity for it to be aligned within the Decent Homes Standard.

When will the increased standards be formalised?

The industry is still anticipating the outcome of the 2020 Energy Performance consultation. This will provide additional information regarding the requirements. Energy minister Andrew Bowie recently mentioned that the initial update for this year will merely consist of a summary of the responses received.

Earlier, the Telegraph reported that landlords would be granted until 2028 to comply with the updated energy efficiency requirements. However, there has been no official announcement to confirm this specific date.

What should landlords and agents be doing to prepare?

The present government guidelines for complying with the current MeeS regulations provide a list of recommended upgrades for landlords, along with their average costs. These upgrades encompass options such as internal or external wall insulation, draught proofing, solar panels, among others.

It is anticipated that the government will officially establish a cap of £10,000 on upgrade expenses. Allowing landlords to seek exemptions if the costs exceed this limit. Various sources of funding are available for these types of upgrades.

How can we help?

Contact our expert lettings team today to discuss your property and how we can help you with these changes.

This article is intended as a guide only and does not constitute legal advice. For more information, visit gov.uk.

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