Cynergy Bank supports the nation’s landlords to help them aid the UK’s green transition

Cynergy Bank is providing funding for residential landlords to support them in making vital improvements to their rental properties to ensure they are compliant with proposed new government legislation.

The changes in the Minimum Energy Efficiency Standards as set out by the government are in line with its target to be net-zero by 2050.  These changes require that from 2025 all newly rented properties will require a minimum EPC (Energy Performance Certificate) rating of ‘C’ – up from ‘E’.  the same rules will apply to existing tenancies from 2028.  For properties without a Valid EPC the fines could increase to £30,000 up from £5,000.

The Bank recognises the challenges that many landlords will face over the coming years and is launching two products in its commitment to support new and existing customers to meet energy efficiency requirements.

• • EPC Property Improvement Loan is now available for the bank’s existing landlord customers to allow them to make necessary energy efficiency improvements to their rental properties. Maximum borrowing amount of up to £500k per borrowing entity – most competitors offer loans of c£25-50k.

• • EPC C+ Term Loan available from June 2023 for existing and new landlord customers who are looking to purchase properties (or refinance existing properties) which already meet proposed new energy efficient standards.

Sharon Maguire, chief product and brand officer of Cynergy Bank commented, “The property market is a core sector in the British economy. We are proud of the support we have provided to residential landlords and property investors over the years. It’s vital we continue to work alongside customers and help them to navigate the energy performance changes. The funding we are providing will ensure they get the right support, at the right time; not only will this help landlord clients and their tenants, but it will ultimately help protect the environment.”

EPC Property Improvement Loan: this product will support the Bank’s existing customers to take positive action to comply with proposed government legislation. The product is a further advance on existing term loans to allow for upgrades and improvements to enhance the energy efficiency of property portfolios.

The loans offer market leading characteristics including:

• Maximum borrowing amount of up to £500k per borrowing entity – most competitors offer loans of c£25-50k. Cynergy Bank customers tend to have multiple properties within their portfolio the Bank recognises that the size of the costs to upgrade all properties will mean potentially larger loans than the market currently offers
• Competitive arrangement fee – 1.5% (market norm is c2%+)
• Simplified online application process aligned to existing borrowing

Analysis by Savills suggests that 2.3 million residential rental properties will need improvements to reach the ‘C’ standard.  Additionally, Savills research of all residential properties suggest it will cost:

• £6,472 per property to move EPC from ‘D’ to ‘C’;
• £13,285 per property to move EPC from ‘E’ to ‘C’; and
• £18,885 per property to move EPC for ‘F’ or ‘G’ to ‘C’

With many of Cynergy Bank’s customers having multiple properties in their portfolios; the market leading maximum loan of £500k will be beneficial, allowing all financing needs to be catered for with one solution.

The ECP C+ Term Loan: this product will reward landlords who want to reduce their impact on the environment by investing in energy efficient homes. Cynergy Bank will provide a property investment term loan with incentives for properties with EPC rating of A, B or C.

“We have supported scaling SMEs through tough environments including the pandemic.  Our teams understand their clients and the markets they operate in. These new products underline our ambition to help our property clients manage their impact on the environment,” added Maguire.

 Government Legislation

Since October 2008, rental properties in England and Wales have required an EPC and the government has been incrementally enhancing the requirements. In 2021 it set stricter targets that stretch through to 2030 with the aim to make homes more energy-efficient and reduce carbon emissions as part of the government target to be net-zero by 2050. According to the UK government, currently, residential properties make up 15% of the county’s climate emissions.