Landlords will be forced to upgrade the energy efficiency of their rental properties under new Government regulations.
The new rules, which were published recently apply from next year. They place additional requirements on landlords to make sure their properties are up to scratch in terms of fuel efficiency.
Any properties rated as an F or a G on the energy efficiency rankings, the lowest possible ratings, will need to be upgraded for new tenancies by April next year and for existing tenancies by 2020. The move has the potential to save tenants more than £2,000 on their energy bills.
The improvements are currently based on there being no cost to the landlord, with several Government loans and subsidies available. The Clean Growth Strategy, also published recently, stated the intention to upgrade as many homes as possible to a C rating by 2030.
Landlords will not be required to find the upfront cost of energy improvements themselves and it is important that the funding is clearly and easily available for landlords to make improvements.
Funding assistance
There are two main sources of funding available to make improvements: the “green deal” loan and the “energy company obligation” or “Eco”.
The green deal offers a loan for energy improvements, which is repaid alongside energy bills. The expectation is that savings will be made through energy efficiency and those savings are used to pay off the loan.
This means the tenants will effectively pay back the loan as part of their energy bills, but at the same time will be making savings on their bills. The length of repayment should also not exceed the life of the upgrades.
The Green Deal Finance Company was sold to private investors in January and as of May is offering loans again. However, the RLA said interest among landlords appeared to be low as the fact the tenants pay seems “counter intuitive”.
Like to know more?
If we can help upgrading your property, please make contact and one of our advisers will be pleased to assist.