Tough new energy efficiency legislation has now come into effect in the private rental sector and one in three landlords are saying they can’t afford to make the necessary improvements. Any property rated F or G in the Energy Performance Certificate ratings needs essential improvements that lift it to at least an E rating. Unfortunately, making such improvements won’t be cheap.
Reduced Energy Bills
The new energy efficiency legislation is designed to reduce the tenant’s energy bills. The government says the measures will save tenants, on average, around £180 per year. Indeed, government statistics show that tenants living in a G rated property spend around £2,860 on their energy bills, compared to £1,330 in a D rated property, so it is clear that there are big savings to be made.
It will also be better for the environment, with reduced emissions. In addition, a higher EPC rating will increase the value of a property, which is useful if landlords are hoping to sell their property at some point.
The energy minister says: “These measures strike a balance between the cost to landlords and delivering benefits to tenants by reducing bills and making homes more energy efficient.”
RLA Is Critical of the New Law
However, the Residential Landlords Association isn’t quite so enthusiastic. It says landlords could be looking at bills of £5,800 upwards to cover the cost of essential repairs. Tasks such as replacing old spotlights for energy efficient LEDs or adding loft insulation could easily cost in excess of £1,200. The RLA reckons many landlords that own older properties rated G and F are likely to sell up rather than pay for significant energy improvements. And those that don’t sell will almost certainly raise the rent to cover the cost of their extra expenditure.
The problem is that many of the UK’s landlords own older properties that have not been updated to reflect modern energy efficiency measures. Many of these properties are in inner-city areas where tenants can’t afford rent hikes.
Claim Your Exemptions Now
The good news is that there is help for landlords struggling to meet the cost of energy efficiency improvements. If the work is likely to cost in excess of £3,500, landlords can apply for an exemption. However, they must obtain at least three quotes and send these to the PRS Exemptions Register. Landlords can also claim an exemption if the tenants in-situ refuse to allow the work to be carried out, although this is unlikely to happen, as most tenants will welcome improvements that save them cash.
The exemptions are only available until April next year, so move fast if you want to claim one on your property.
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