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Buy-to-Let mortgages might help Minimum Energy Efficiency Standards

Minimum Energy Efficiency Standards (MEES). Have you heard of them? Just one in twenty (4%) landlords and tenants had in April 2018, according to research by Just Landlords – when the Standards made it illegal to take on new tenants in a property with an Energy Performance Certificate rating below E.


But unless that proportion goes up, a fair number of landlords will be in for a nasty shock soon enough. According to Government figures, around 300,000 properties are still rated F or G nationwide. But from April 2020, existing tenancies in properties rated below E will become illegal too. A fair number of buy-to-let landlords who rely on their property as their pension face the prospect of a £5k fine and their main source of income being out of action, until they get their polluting properties into shape.


Some renovations needed for MEES can be covered on a no-cost basis. But landlords that sit on poor-performing properties may be left needing to make major upgrades – and having to pay for them out of their own pocket.


While tax changes and market uncertainty have taken a little lustre off the appeal of Buy to Let as a retirement solution in recent years, there is little doubt that for many it is still a great option. At Canada Life, we’ve seen plenty of cases of retirees who rely on their rental property not just for their day-to-day income, but also to cover ongoing care costs. For them, the prospect of losing their rental income is a complete non-starter. But equally, not all of them have the capital on hand that would be needed for extensive property improvements.


Luckily, there are options available that can help landlords to preserve this income. Buy to Let products have recently come onto the market, that allow older landlords to unlock some of the equity in their properties tax-free, while keeping their portfolio intact.


In the year since these products came to market, we’ve seen them used for a range of purposes, from supplementing income, to covering upfront care costs, to even being used to help younger relatives onto the housing ladder. But for over 50s relying on properties that are failing the energy test to fund their retirement, getting them into shape to ensure they don’t lose that income stream could be one promising use for them that could help secure peace of mind.

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.