29th March 2018
Low EPC rating? How about selling at auction?
A change in the rules from 1 April means that landlords with properties with a low energy rating will not be able to let them.
But this could be the perfect opportunity to take advantage of the benefits of selling at auction.
Andy Thompson, senior valuer at SDL Auctions North West in Manchester, pointed out that in the UK nearly one fifth of properties are currently rated with an Energy Performance Certificate (EPC) of F and G.
The new rules, the Minimum Energy Efficiency Standards (MEES), make it unlawful from April 2018 to let residential and commercial buildings in England and Wales which do not have a minimum EPC rating of ‘E’.
Andy Thompson said: “Landlords are faced with a choice. They either need to improve the energy efficiency rating of the property by making relevant improvements, or they can choose to sell those properties at auction.
“Many landlords may use the new regulations from 1 April as a reason to rationalise their portfolio, and this could bring a number of properties on to the market that are ripe for sale by auction to someone who is prepared to take on the work required and create a new, fully compliant, home.
“We have already seen plenty of examples of rental properties that have sold well at our Manchester auctions this year.”
Examples like 74 Ackroyd Street in Openshaw which sold for £75,000, from a *guide price of £70,000. This is a two bedroomed, mid terrace property close to all local amenities including shops, schools and transport links as well as being located within walking distance of Lime Square shopping centre.
It was sold with an existing tenant in place producing an annual rental income of £6,240 (£520 pcm).
Another good example is 125 Heathcote Road in Gorton, which sold for £70,000 (guide price £64,000), and is a two bedroomed, mid terrace property off Hyde Road with good local amenities and excellent transport links to the city centre. This property is currently let producing an annual rental income of £6,420 (£520 pcm).
Others include two bedroomed properties such as 25 Lowton Avenue in Moston which sold for £70,000 (guide price £63,000), and is currently let at £495 pcm, and 107 Fernclough Road in Harpurhey, which sold for £70,000 (guide price £64,000), and is let on a monthly rental of £520 pcm,
Similarly, three bedroomed properties such as 40 Gill Street in Moston, a mid-terrace property sold for £80,000 (guide price £73,000) producing a rental of £600 pcm, and 46 Ventnor Street in Harpurhey, sold for £80,000 (guide price £73,000), and let at £575 pcm.
Andy Thompson said: “While some see issues with the new MEES regulations, others will recognise opportunities, and we are expecting to see a lot more properties ripe for upgrade coming under the hammer in our Manchester auctions this year.”
The next SDL Auctions North West auction at the AJ Bell Stadium in Manchester is on Thursday 24th May and the team is currently inviting entries for inclusion in the catalogue.