Landlords to face pressure on greener properties

Landlords in the UK have been warned that they will face fines from 2015 if their rental properties are not energy efficient.

The government is planning to push through new legislation to make rental homes greener in a bid to meet new European Union standards for carbon emissions.

Rental properties are often among the UK's oldest housing stock, which can mean that bringing them up-to-scratch has been expensive.

A survey conducted in 2008 for the English House Condition report revealed that more than a fifth (21 per cent) of homes in the private rented market produced the most carbon emissions.

Under the new green legislation, tenants will also have the right to ask their landlords to make their rental home greener, with local authorities backing up their demands.

If a landlord refuses to make improvements to the property, they could be fined by councils keen to meet energy efficiency targets.

The government has moved to say that the schemes will not be costly for landlords and could in fact make their properties more attractive on both the privately owned sector and the rental market, as they will be warmer and cheaper to run for tenants.

In a bid to incentivise homeowners and property investors to upgrade their homes, the government has struck what is called the Green Deal with home improvement firms.

The Green Deal enables people to have their homes fitted with energy efficient improvements without any upfront costs. The costs, in the form of a loan, are then paid back over 25 years, ideally with money recouped through bill savings.

Landlords also have the added incentive of the Energy Savings Allowance, which can knock off £1,500 off their annual tax bills for greening up properties.

With gas and electricity bills expected to increase, the savings could be substantial.

Energy bosses told MPs earlier this year that they expected bills to go up by nearly 25 per cent over the next ten years.

If you are keen to start getting your rental property up-to-scratch ahead of the legislation coming in, there are a few improvements that could easily cut down bills ahead of 2015.

Landlords can claim for all of the below improvements under the scheme, including cavity wall and loft insulation. In addition, they can claim for external and internal insulation of solid walls.

High carbon heating systems can also be replaced by gas central heating, which could have an immediate impact on running costs.

Renewable energy technologies such as ground source heat pumps and solar panels can be claimed for, which can provide an additional source of income under the feed-in tariff schemes legislated for by the previous Labour government.

Simple adaptations are available under the scheme, such as less wasteful shower heads, power down switches and meter monitors, enabling tenants to actively keep down their energy use.

There are numerous benefits to be had both in the short-term and the long-term by undertaking such changes. These can include securing longer tenancies, reducing the chances of rent arrears as bills continue to increase.

In addition, a good energy performance certificate can boost the value of older properties on the housing market.

If you are weighing up the pros and cons of energy-efficient home improvements, it could be a good idea to familiarise yourself with the law and draw up your tenancy agreements ahead of changes in tenancy regulations.

Lawpack has recently published a Energy Efficient Tenancy Agreement form download which includes legally-binding energy efficiency provisions for both tenants and landlords. These terms and conditions in the tenancy agreement include making sure that tenants do not do anything to lower a property's existing energy performance rating.

Key provisions will include enforcing good recycling practices and replacing older bulbs with energy efficient ones, which take up 80 per cent less energy than incandescent bulbs.

The measures in the tenancy agreement will allow you to establish good energy efficency practices in the home, while also reassuring tenants that the property is on its way to meeting the latest green standards for rental properties.

  • Energy Efficient Tenancy Agreement: solicitor-approved AST tenancy agreement download for a furnished property that includes energy efficiency clauses.

Published on: January 4, 2011

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