Landlords Can't Afford New Energy Efficiency Upgrades

AFS Team·2 April 2019·4 min read
Landlords Can't Afford New Energy Efficiency Upgrades

Landlords Can't Afford New Energy Efficiency Upgrades

The introduction of tough new laws covering energy efficiency for rental properties means one in three landlords cannot afford to upgrade, one organisation warns.

The Residential Landlords Association (RLA) says that the work required to bring a rental property up to a minimum grade of E for the Energy Performance Certificate will cost an average landlord £5,800.

The RLA says that around one in five landlords with a property that is rated F or G will now need to sell up and 51% of landlords will be forced to increase rents to help pay for the upgrade.

The law covering energy performance certificates for rental properties changed from 1 April and all new tenancies must have a rating of at least E.

The aim is to reduce a tenant's energy bill by around £180 every year and also reduce the UK's greenhouse gas emissions.

‘Making homes more energy efficient’

Claire Perry, the energy minister, said: "The measures strike the balance between delivering benefits to tenants and the cost to landlords by making homes more energy efficient and reducing bills."

For those landlords who do not carry out the work, they are facing fines of up to £5,000 from their local council.

The Department for Business, Energy and Industrial Strategy says that the average cost for the relevant work is £1,200.

Should the upgrade work cost a landlord more than £3,500, then they can apply for an exemption from the 1 April introduction.

However, from April next year, the new rules will cover all tenancies and there will be no exemption under the rules from this date.

The RLA's David Smith said: "We call on the government to ensure that any work that a landlord carries out on their property, which is recommended for the energy performance certificate, should be tax-deductible."

The RLA says that landlords who repair a property can claim the cost back against tax but this does not extend to home improvements which the RLA says is a "ridiculous situation".

Strong demand for zero deposit schemes

Meanwhile, it's been revealed that there is strong demand for zero deposit schemes from tenants.

According to Your Move, more than half of tenants say they are interested in insurance-backed or alternative schemes that act as a substitute for paying large deposits when renting.

The findings show that 70% of tenants say that having a choice in paying an upfront deposit would influence their decision over renting a specific home.

A spokeswoman for Your Move said: "There is a demand for an alternative to lump sum cash deposits with more people now choosing to rent and it's increasingly important that agents can cater for all types of tenants by offering flexibility and choice."