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Goverment Measures to Improve Energy Efficiency of PRS

Monday, May 16, 2011 Posted in: Property Market Landlords

As anticipated, the Government has announced plans to introduce measures that will place responsibility for improved energy efficiency of property in the Private Rental Sector on landlords.  

Energy and Climate Change Secretary, Chris Huhne this week announced plans to introduce regulations to ensure that all landlords face minimum energy efficiency standards under the Green Deal. From April 2016, the Government will make it unlawful to rent out a property which has less than an E energy efficiency rating. The Green Deal is a Government flagship programme enabling people to access finance to pay for the upfront cost of work which will be paid back over periods of up to 25 years via users' fuel bills.

The Government insists that the Green Deal proposals will "help the most vulnerable", however landlord bodies have highlighted that many tenants may not be happy, or in a few cases even able, to pay higher utility bills to repay improvement grants taken out by their landlords. Other landlords feel it could blight the rental market.

Ian Potter, Operations Manager of ARLA, also expressed reservations of the Deal. He said "The Government's decsion to allow F and G rated properties to remain on the market until 2018 is a practical one, given that around 17% of properties in the private rental sector fall into this category. This equates to around 500,000 properties.

"However we remain concerned about the lack of details on 'greening' rental stock. So far, there is no clarity on how evergy improvments will be assessed or enforced - or, importantly, how this assessment will be funded.

"We believe that the Bill in its current form risks disincentivising the lettings market and discouraging landlords from investing in the private rented sector." No consideration appears to have been made for the many Grade I and Grade II listed properties that are nearly always worse than an E on an EPC so landlords are hopeful that an exemption will be made in respect of these properties.

Ian Fletcher, director of policy at the British Property Federation, said: "It is important that landlords start to consider whether they will be caught and have their plans ready for when the Green Deal goes live next year. There are opportunities, however, as well as threats in improving energy efficiency and landlords who start thinking about and acting on the issues will be best placed to handle both." 

College and County still believe that landlords in the Private Rental Sector should be lobying for grant aid to be made available to meet some of the inevitable costs of any move to improve energy efficiency. There are a number of ways that this could be managed; here in Oxford, the licensing of HMOs provides an opportunity for the local authority to handle the distribution of any grants.  They will have all the information necessary to target grant aid strategically towards the property that requires the greatest intervention.

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