Nobody knows why we celebrate April Fools on 1 April or why, for one morning each year, it’s acceptable for us to play pranks on each other. It’s just another one of those traditions whose exact origins have been lost in the mists of time.
What is for sure, however, is if you’re a landlord who hasn’t had electrical safety inspections carried out on your properties by 1 April, then the joke could be on you.
From that date, landlords failing to ensure that existing tenancies haven’t received a valid Electrical Installation Condition Report could be in for a nasty shock. And I’m not talking about one of those static ones you sometimes get from accidentally rubbing up against something; I’m talking about one in the form of a potential fine of up to £30,000.
The Electrical Safety Standards in the Private Rented Sector (England) regulations came into force on 1 July 2020 to ensure all landlords were offering high-quality, safe and secure housing. For the first nine months, the standards only applied to most new residential tenancies, but from 1 April they will encompass both new and existing tenancies.
All rented properties need to be certified as safe by way of an EICR prepared by a suitably ‘qualified and competent’ person. As part of the report, all fixed electrical parts of the property, including the wiring, plug sockets, light fittings and the fuse box need to be inspected and tested, as well as permanently connected equipment, such as showers and extractors.
Landlords are obliged to provide their tenants with a copy of the report within 28 days of the inspection, as well as retaining a copy of the report until the next inspection is due. They also need to ensure the electrical installations in their properties are inspected and tested at least every five years thereafter.
Landlords failing to have these checks completed by a qualified professional could be fined up to £5,000 for a first offence and up to £30,000 if they reoffend.
So where do you turn if you’re approached by a landlord who needs to access the finance to buy a new investment property, but one which needs work to bring it up to the required electrical safety standards before they can rent it out?
This is the sort of scenario where Refurbishment Buy to Let could be the perfect solution. Precise Mortgages’ Refurbishment Buy to let proposition offers the best of both worlds – the flexibility of a bridging loan to purchase the property and carry out the work quickly, together with the surety of an exit onto a buy to let mortgage once the work has been completed, provided the property meets the expected valuation following the refurbishment.
Our streamlined process makes it easy for you to place your customers’ cases with us, while our experienced team of underwriters is here to process applications as quickly and efficiently as possible.
With around 4.4 million UK households living in private rented accommodation and electrical equipment responsible for almost 15,000 domestic fires each year, according to government statistics, the 1 April deadline will ensure even more tenants are protected by the legislation. Brokers can play an important role by making sure their customers are aware of the rule changes and letting them know there is a solution if they need to bring a new property up to standard before letting it out.
Original Article from Mortgage Strategy 26/03/2021