Landlords to contribute to energy efficiency
The government is proposing to force private landlords to contribute towards measures to improve their properties' energy efficiency.
In a consultation paper, issued yesterday (19 December) the Business, Energy and Industrial Strategy (BEIS) department proposed landlords should pay up to a maximum of £2,500 to bring their properties up to Energy Performance Certificate Band E.
Minimum energy efficiency standards, which will take effect from April 2018, will require private landlords to ensure their properties meet Band E.
Under the existing “no cost to landlord” principle, landlords will be expected to meet Band E or get as close as possible using available third party funding, such as the Green Deal or ECO funding.
An estimated 280,000 private rented properties would not meet the new standard because they are rated Band F and G, according to modelling from the 2014 English Housing Survey.
However, the Green Deal has been scrapped and the BEIS consultation paper states the ECO scheme is not generous enough to bring the outstanding stock of private rented homes up to scratch.
The consultation paper said: “As a result of these shifts in the funding landscape, it is highly likely that many landlords of F and G rated rental homes will be unable to deliver improvements in line with the current regulatory requirements. This would be to the continued detriment of their tenants.”
The consultation paper proposes scrapping the “no cost to landlord” rule. And it outlines the costs of upgrading the properties should be capped at £2,500 per property.
If a landlord is able to secure funding for works via schemes like ECO, the paper says the cap on costs of works should not exceed £2,500.
According to the BEIS analysis, the average cost of improving an F or G rated domestic PRS property to EPC Band E is likely to be £865 so less than the cap.
Dr Joanne Wade, chief executive of the Association for the Conservation of Energy, welcomed the consultation paper but expressed disappointment about the cap having been set lower than the previously mooted figure of £5,000.
“We believe the proposed cost cap £2,500 is too low. The alternative of a £5,000 cap would double the average energy bill savings for tenants and enable 35,000 more homes to be brought up to the minimum standard.
“We simply do not understand why third party funding contributions such as ECO or Green Deal Finance, should be included in the cap: the cap is intended to ensure that landlords are not unduly burdened and hence financial contributions from other sources should be additional to this and therefore deliver additional energy savings by enabling more homes to be brought up to the minimum standard.”
This article first appeared on edie’s sister title website, Utility Week