Property Compliance in Funding & Transactions
Property transactions are not driven by funding alone. Compliance, regulation and due diligence can materially influence lender decisions, valuation outcomes and the ability to complete.
Energy performance, safety obligations and wider property considerations can all form part of the risk assessment applied by lenders, valuers and other parties to a transaction.
Compliance is part of the funding decision
Regulatory and property compliance considerations can directly affect funding. Energy efficiency standards, fire safety obligations and other property risks may be considered within lending decisions, valuation commentary and legal due diligence.
Minimum Energy Efficiency Standards, commonly known as MEES, are particularly relevant where a property is let or intended to be let. EPC performance and the applicable regulatory position may affect rental use, expenditure requirements, valuation and financeability.
Energy Performance Certificates
Energy Performance Certificates provide an energy efficiency rating for a property. EPC ratings can be relevant to sales, lettings, valuation, improvement planning and the application of Minimum Energy Efficiency Standards.
View EPC considerationsMEES Regulations
Minimum Energy Efficiency Standards build on the EPC framework and can impose minimum energy performance requirements for certain rented properties. The position may affect letting strategy, improvement expenditure and funding considerations.
View MEES considerationsFire Safety & Asbestos
Fire safety and asbestos obligations can be relevant to property ownership, occupation and transactions. Depending on the property and circumstances, lenders, valuers or legal advisers may require appropriate reports, assessments or remedial information.
View fire & asbestos considerationsHow property compliance can affect a transaction
The relevance of each issue will depend on the property, its use, the proposed transaction and the lender’s requirements. Where applicable, compliance considerations can affect:
- Property valuation and marketability
- Lender appetite and lending terms
- The ability to let or refinance a property
- Required improvement or remedial expenditure
- Legal and valuation due diligence
- Transaction timescales and completion
A more effective approach
Rather than treating compliance as a late stage requirement, considering property condition, energy performance, safety and funding requirements early can support better informed decisions and reduce avoidable friction later in the transaction.
This can be particularly important where EPC ratings, MEES requirements or property specific issues could require further investigation, expenditure or lender consideration before completion.
Related property and funding guidance
Compliance is one part of the wider property funding assessment. The following sections provide additional context when considering a purchase, refinance or property investment.
Discuss your property transaction
If you are considering a property purchase, refinance or portfolio transaction, The Aftersales Network can help you consider how the property, the proposed funding structure and relevant due diligence may interact before approaching the market.
