As the Covid-19 pandemic dominates our lives it’s difficult to look beyond the immediate future. But life and lettings go on including the government’s recent unveiling of dramatic energy efficiency targets for landlords.
Plans to raise minimum energy efficiency standards for rental homes were revealed last month, to coincide with the launch of the government’s new Green Grants scheme.
As of this year all rental properties (other than those with valid exemptions) must have an EPC rating of E or higher to be legally rented out.
The government now plans to raise this level to C – or higher – from April 2025 for new tenancies and from 2028 for existing tenancies.
The plans include a cost cap of £10,000 per property and a £30,000 fine for non-compliance.
As a landlord myself I understand the need for improvements across the sector – and the benefits that come from energy efficient homes for landlords, in that they are more attractive to potential tenants, and renters as they mean cheaper bills.
Landlords are already making improvements. The latest English Housing Survey figures show the number of rental homes with an energy-efficiency rating band of A–C has increased over the 10 years to 2018 from 11.6% to 32.6%.
But there will be challenges for many, particularly those with older properties particularly pre-1919 homes, or those that are off-grid, or in areas where the cost of upgrades is disproportionate to property values.
According the English Housing Survey 33% of homes in the PRS were built before 1919 so are likely to have solid walls, making insulation much more difficult. Listed status can also affect landlords’ abilities to make changes.
More broadly, there is also the issue of ‘moving goalposts’. If the government wants to go ahead with this plan, and make no mistake, it is committed to this direction of travel, there needs to be clear, long-term proposals for the trajectory of change along with a package of funding to support landlords.
This will help us to plan changes and improvements to our properties over the next 10 -15 years and how to fund them.
The Government is looking to move to ‘low carbon-heat ready’ in the private rented sector by 2030, which means making as many changes to the fabric of buildings as is possible in anticipation of the phasing out of gas boilers, as has already been announced for new-build homes.
In all the Government has committed £9.2 billion in its manifesto to energy efficiency measures and we will continue our ongoing campaign to ensure a share of that is used towards support for the private rented sector.
My colleagues in our policy department are now working on our response to the consultation, which closes on December 30.
This means it is unlikely any new laws will be passed until next March at the earliest.
Green Homes Grants
The Green Homes Grants are the first move by the Government to incentivise energy efficiency improvements in rental homes.
Through the scheme the Government will provide vouchers that will cover up to two thirds (67%) of the cost of qualifying improvements up to £5,000.
Split into primary and secondary, you must qualify for primary measures before you can apply for secondary measures and the installer will receive payment from the government for the costs covered by the voucher.
But if you want to take advantage of this funding – which is available in England only – you will need to move fast.
Not only is the time period set by Government tight – ending on March 31, 2021 – by which time work needs to be completed – there are could also additional issues finding accredited tradespeople people to do the work, with more and more areas entering Tier 2 and 3 coronavirus measures, meaning greater restrictions.
The system may seem confusing – but it is not often government cash is made available in this way and it is worth remembering that although there is a cost to you as a landlord the improvements will still need to be made at some point when the funding is gone.
We will be holding a second webinar on the issue on December 9. To register keep an eye on our webinar pages here.