The National Retrofitting Scheme - What does it mean for our borrowers?
Following the announcement that grants of more than €25,000 will be offered to individual householders and investors to help pay for deep retrofits of homes, we’ve been asked what it means for Onate borrowers.
The current government has set itself targets of retrofitting 500,000 homes to B2 standard by 2030 and installing 400,000 heat pumps. A network of “one-stop shops” will form a crucial part of this plan. These supports will be available throughout the country and will cover the application process, access to finance and construction work.
While the news is pertinent to many of our potential borrowers, the process can appear confusing and difficult, but if explored correctly, can save money in the long run.
Exemptions
There are two different kinds of exemption when it comes to retrofitting properties:
The initial setting of the rent on a dwelling which had not been rented for a period of two years prior to the immediate tenancy commencement date. All rent reviews thereafter must adhere to the Rent Pressure Zone formula
A 'substantial change' in the nature of the accommodation has been defined in the legislation and will only be deemed to have taken place once a certain criteria is met.
That criteria must include:
A permanent extension of over 25% of the current floor area
The internal layout of the dwelling is permanently altered
The number of rooms permanently increased
A dwelling must be adapted for access for a person with a disability
If a building is currently rated D1 or lower, the building BER needs to improve by three building energy ratings
If a property currently has a C3 rating or higher, it needs to improve by two building energy ratings
Pre-63 Properties
Another issue of concern is the retrofitting of Pre-63 properties. Some pre 63's are subject to preservation orders and many are not. Most Pre-63 properties are based across four floors so an overall heat loss reflects better on a Pre-63 in comparison to a one or two bed apartment. Apartments are generally smaller and the BER is more difficult to increase as there are less options to work with.
If the property is a protected structure, the following needs to be carried out:
Metal frame insulation with a protective layer for damp proofing as the basement is below ground
Air to air heat pump installation. Issues arise due to location of external pumps, ducting holes through walls
Install an internal second window to increase the u-value.
Estimated Costs
The below table outlines a rough estimate of costs and associated grants for a typical 3/4 bed semi-detached house and a typical 1/2 bed apartment:
Top Tips for Investors Looking to Retrofit a Property
Be aware of the ratings advertised when a property is up for sale as they can sometimes be misleading. It may be a lower rating when it is inspected after purchase
Always check the minimum BER requirements for that particular area with your local council as some councils vary
If you’re looking for a long term lease from the council, you need to ensure the property was vacant for at least 12 months and that there is a demand for social housing in that particular area. This is the Repair and Leasing Scheme and the property should be assessed by the local council representative in advance and comply with minimum housing standards
Do your research in advance. If you are purchasing a second hand property that is more than 20-25 years old and it requires internal insulation, heating upgrades, new windows and doors etc, it may be a good time to get the electrics checked out at the same time. It is best to rewire and upgrade and hardwire your CO2 alarms, smoke alarms and heat alarms.
At Onate, our offering is structured to allow borrowers to release equity quickly and easily from their residential and commercial properties. Our team of experienced, specialist property lenders offer bespoke property bridging loans to home builders, developers, property investors and entrepreneurs. We are fast and flexible, and we assess each case on its merits. All decisions are taken in-house which means we can move quickly and with certainty. We have an appetite to lend in all locations nationally – from cities and large towns to small villages and rural locations.
This article was written in conjunction with John Powell, Managing Director of Premier Property Group
