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Landlords may have to spend up to £5,000 to keep rental homes in the market
Original Author: Emily Twinch
Government officials have estimated it could cost landlords between £1,800 and £5,000 to bring energy-inefficient properties up to an EPC rating of E.
That will become the legal minimum for private rented properties when new regulations come into force in England and Wales from 2018.
Properties with EPC ratings of F and G will be progressively banned from the market, starting with rental homes with new tenancies. The band E requirement will be extended to existing residential tenancies as from April 1, 2020.
The Residential Landlords Association estimates that a total of 330,000 rental homes in England and Wales are likely to be affected.
A typical package of measures for a small semi could include gas central heating and low energy lighting at £4,000, loft insulation at £300 and cavity wall insulation at about £500.
It is unclear whether a cap could be set of £5,000 – meaning that if a landlord has spent this amount on improving a typical small semi, which still did not attain an E rating, the landlord could let this property out anyway.
Richard Jones, of the RLA, said the new energy rules will mean landlords passing on their costs to tenants.
He said: “Whilst we all want to see improvements in the energy efficiency of homes to rent, that cannot come at the expense of driving up rents.”
Jones said when laws were passed under the coalition government it was expected landlords would be able to finance the improvements through the Green Deal and Energy Company Obligation (ECO).
The Government stopped funding the Green Deal a year ago because of poor take-up of the loans, which were widely considered to be very expensive.
ECO, available to poorer households, is due to end next year but the Government is currently running a consultation on whether to extend it in some form until 2022.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The private rented sector minimum standards are coming into force in April 2018.
“We are considering a broad range of options for implementation and will publish further guidance on these standards in due course.”
She stated landlords were able to apply for ECO funding. Government statistics show the number of private rented sector properties receiving ECO since 2013 was 196,194 (14% of all private rental households compared to 73.2% of owner-occupiers in receipt of ECO funding and 12.7% for social landlords).
The data shows there were 1,871,464 measures installed under ECO up to May 2016. Up to 36% for cavity wall insulation, 25% for loft insulation and 22% for boiler upgrades.
About 123,000 were for solid wall insulations (7% of all measures).
