A recently published blog started with the sentence, “It is well known the 2011 Energy Act will have implications for property owners, investors and managers”. What? Did we miss something? Anyway, the good news is that while passed in 2011, the details of the Act are yet to be finalised but the main change effective from 1st April 2018; it will no longer be legal to let a property below a specified minimum EPC rating. Why is that good news? Because the minimum level is likely to be level E and in all the Energy Performance Certificates we’ve seen over the years, we’ve never seen one in the F or G category (And, if we did we would have to turn down the opportunity to work with the Landlord who owned that property as clearly it wouldn’t be fit for purpose).
However, wherever there is good news, there’s usually a bit of bad associated with it and, in this case, it comes with the Act stipulating private residential landlords must respond to a tenant’s “reasonable request” for consent to energy efficiency improvements where a finance package such as the Green Deal is available. This bit of the Act is scheduled to be effective from April 2016.
Actually though, with the announcement this week, this news isn’t bad after all. While the Green Deal in its current form has been a complete waste of space, it was announced it is to be revamped. The current Green Deal forces households to borrow money to fund improvements and repay it through their energy bills and, not surprisingly, take-up was disappointing being widely criticised for its complexity and cost. However, the new scheme, will reimburse up to 75 per cent of the cost of qualifying improvements provided certain conditions are met and – happy days- is also available to private landlords.
In order to claim the money, householders must first obtain a Green Deal Assessment Report at a cost of £100-£150, or provide an energy performance certificate less than two years old. They can then apply to the fund to carry out two improvements from an approved list. These include installing cavity or solid wall insulation, double glazing, new doors, loft insulation or fitting a new boiler. If the application is approved, a voucher for the work will be issued. The maximum Grant available will be £7,600.
The new incentive scheme looks like a simpler way for people to engage in energy efficiency than the initiative it is replacing. The funds are also more accessible, as an energy performance certificate up to two years old can be used, rather than having to get a Green Deal assessment. It also looks like being a cost effective way of improving your investment property which in turn will increase the value, rentability and level of rent. Sounds like it could be a winner.