Green Mortgage for energy efficiency improvement

Government rethink on energy efficiency improvement costs

The Residential Landlords Association (RLA) are today welcoming the Government’s decision to moderate the amount it expects landlords to pay for energy efficiency improvement costs, where homes have to be brought up to a minimum E EPC rating.

This requirement comes into force for new lets and tenancy renewals from April 2018 and for all residential lets from April 2020.

Original Government proposals were that landlords would be required to pay up to £5,000 per property upfront to meet new energy efficiency standards.

However in a new consultation, Ministers have followed the recommendations of the RLA and cut the limit to £2,500.

The RLA argues that this could help avert a new ‘Green Tax’ on tenants as costs get passed on to them in higher rents.

Whilst the cap has been lowered, the RLA is calling for changes to the flagship scheme for tackling fuel poverty.

Under the Energy Company Obligation (ECO), large gas and electricity suppliers are obliged to help households with energy efficiency measures.

An analysis by the RLA has found that up to June 2017, just 14 per cent of all funding under the ECO scheme was spent in the private rented sector despite the sector representing 20 per cent of all households and also having proportionately more older properties than other sectors.

With 43 per cent of private rented homes having solid walls, more than any other housing type, fuel poverty is worse in the private rented sector than in any other tenure.

The RLA is calling for a portion of funding under ECO to be ring-fenced to recognise the unique challenges in the private rented sector. It also wants measures recommended on an Energy Performance Certificate to be tax deductible when carried out.

RLA Policy Consultant, Richard Jones, said: “The Government has clearly listened to the RLA and cut in half the original cap on how much landlords would be expected to pay for energy efficiency improvements. This is welcome news for tenants as it will mean costs being kept down.

“However the RLA still has concerns that the government is proposing to abandon the principle that the landlord should not have to pay the cost of the work upfront.

“We recognise the importance of tenants living in warm homes. That is why it is vital that the funding is available under ECO to make improvements to their properties.”

Written by Sally Walmsley

Blog Post from Residential Landlords Association

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