Landlords forced to make homes more energy efficient or else

It’s not easy being a landlord these days. While financial advisors still maintain that property offers a sound return on investment, landlords are having to cope with mortgage relief changes, the abolition of the annual fair wear and tear allowance and now an extra 3% stamp duty. That’s not all as a new law will give tenants the right to force landlords to make homes energy efficient which they cannot “unreasonably refuse”.

From April 2016, The Department of Energy and Climate Change (DECC) will enable tenants to request consent from their landlords to ensure their properties are to at least a “Band E” rating. Properties are rated Band A for the most energy efficient to Band G for the worst. Tenants in homes ranked in Band F and G can force their landlords to install energy efficient measures to make the homes more energy efficient. The DECC estimates that families living in the least energy efficient properties spend an additional £1,000 per year heating their homes, and this extra expense often affects the poorest households. Nearly one in ten properties in Britain is believed to fall into Bands F and G.

There are issues, though. In June 2015, the Green Deal which provided landlords with financial incentives to make their properties more energy efficient, was scrapped. A replacement scheme has been promised but has yet to materialise. Interestingly, under the proposals coming on board in 2016, landlords can only be compelled to make their properties energy efficient if they can access funding. Without the Green Deal in place or a replacement for it on the horizon, how the government plans to enforce its proposals is baffling.

Benham & Reeves Lettings is strongly recommending that its landlords take the opportunity to upgrade their properties if they can. From April 2018, it will no longer be permissabile for landlords of Band F and G properties to let them. However, upgrades are usually relatively inexpensive and painless. Experts at the DECC state that 40 per cent of rented properties could be lifted into Band E or higher just by installing loft insulation.

“This is another example of where most decent law abiding tenants have nothing to worry about but where rogue landlords are likely to swerve the law that’s specifically targeting them,” comments Marc von Grundherr, Lettings Director at Benham & Reeves Residential Lettings. “The issue here is that the draughtiest homes are often owned by the most unscrupulous landlords and let to the poorest tenants. Many of these tenants won’t know their rights or will be afraid that if they make demands, it could have an adverse effect on their tenancy. However, we need to weed out these types of landlords and ensure housing standards are raised across the industry. The DECC also needs to ensure the scheme is widely publicised, not just in mainstream publications but to the poorest tenants who are often voiceless.”