Improved energy efficiency Central Housing Group

One in three landlords cannot afford to meet new energy laws

One in three landlords cannot afford to upgrade their properties’ energy efficiency to meet tough new laws coming in today.

All new tenancies with Energy Performance Certificate (EPC) ratings of F or G must have upgraded to at least band E from April 1.

The law is meant to cut tenants’ energy bills by up to £180 a year, lower the country’s greenhouse gas emissions and increase landlords’ property prices.

Energy minister Claire Perry said: “These measures strike a balance between the cost to landlords and delivering benefits to tenants by reducing bills and making homes more energy efficient.”

Landlords who have not carried out the work can be fined up to £5,000 by councils.

The Department for Business, Energy and Industrial Strategy (BEIS) is also investigating other ways to enforce the new laws. It estimated the average cost of the work needed, such as installing low energy lighting or loft insulation, is £1,200.

But the Residential Landlords Association (RLA), a trade body, said such work would cost landlords £5,800. It also said the cost would cause 20pc of landlords with F or G rated properties to sell up, and 51pc would be forced to raise rents to compensate.

If the work costs more than £3,500 then landlords can apply for an exemption.

To qualify, landlords need to supply three different quotes to the PRS Exemptions Register, a public database, to prove the work costs more than £3,500. Landlords can also register an exemption if tenants refuse to allow the upgrade work to be done.

The rules will extend to existing tenancies in April 2020, and landlords will no longer be able to apply for the exemption from this date.

Reader service: Learn how much you could save by switching energy providers with The Telegraph
Landlords who repair homes can claim the cost back against their income tax, but they cannot do this for improvements.

David Smith, of the RLA, said: “This leads to a ridiculous situation where, for example, a landlord who replaces a broken boiler can claim tax relief, but if they want to upgrade an energy inefficient one, they cannot.”

The RLA wants the Government to change the rules to make any EPC-related upgrade work tax-deductible.

“We are calling on the Government to ensure that any work a landlord carries out on a property that is recommended on an Energy Performance Certificate should be tax deductible.”

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