Green Homes Incentive For BTL Sector
The government’s embarrassing axing of the Green Homes Incentive means there must now be a replacement to help the private rental sector become more energy efficient.
Angus Stewart, chief executive of online buy to let mortgage broker Property Master, says there is what he calls “a green gap” needing filling by government.
The £2 billion Green Homes Incentive scheme was launched in September, making up to £5,000 per property available for landlords and other owners.
“We know the Green Homes Grant scheme was not without its problems. It was difficult to access, hard to find the correctly registered tradespeople and the process of redeeming vouchers was cumbersome” says Stewart.
“But rather than reform the scheme the government has chosen to scrap it and leave landlords with a ‘green gap’ of finding anything up to £10,000 per property to meet these new requirements in just a few years.”
The government has set a target as part of its Net Zero greenhouse gases by 2050 programme of raising the energy performance certificate for all new tenancies in the private rented sector to being a C or above by 2025. By 2028 this requirement will be extended to all private rented sector properties. At present around 67 per cent of private rented properties in England and Wales – around 3.2 million in total – are a band D or below.
Stewart continues: “Around half of all landlords own just one property and they are already dealing with increased taxes on private rented property and for many the continuing Coronavirus crisis that has pushed some 800,000 people into rent arrears. Indeed, landlords could be forgiven for thinking the new energy regulations in the absence of government support is just an extra backdoor tax on the private rented sector.
“For many this will be a squeeze too far on their finances and they may well choose this moment to exit the market which will reduce the number of homes for rent.”