You may not have heard of the Government’s new Green Deal. But it could pay you to find out more about this initiative designed to improve the energy efficiency of residential properties. In effect, it’s a very cheap loan scheme which allows homeowners (including landlords) to pay for energy saving improvements such as a new boiler, cavity wall or loft insulation or draught proofing. Rather than pay the cost up front, the measures can be paid for over time as an extra charge on your energy bill.
What should You Do?
There are a few simple steps. An accredited adviser must carry out a property assessment, visiting your property, assessing its energy performance and recommending suitable energy saving measures. Then you need to obtain quotes for the work from a Green Deal provider. Once you have chosen a provider and the work has been completed by an authorised installer, you start to pay back the costs as an additional charge on your energy bill (regulated by Ofgem). All providers within the scheme are covered by the Department of Energy and Climate Change’s Code of Practice and must display the quality mark.
The Golden Rule
The Golden Rule of the Green Deal is that the amount you save on bills must be greater than the cost of the energy saving measures (up to a maximum of £6,500).
Key Points for Landlords
For existing tenancies, the landlord or tenant can only sign a Green Deal plan with the permission of the other. There are also plans to require landlords to install energy saving measures if tenants issue them with a ‘reasonable request’ but this is unlikely to come into force before April 2016.
Because the finance obligation passes with whoever is liable for paying the energy bills, (not the person that signs the Green Deal plan), when you sell the property, you must disclose any Green Deal finance as part of EPC information. You should also obtain a written acknowledgement of the finance from the tenant.
This is an excellent initiative for landlords, giving a cost-effective way to install energy saving measures which reduce bills so will have the added benefit of making a rental property more attractive to tenants. Spreading the cost means more landlords and tenants are likely to instigate these measures. It should also help landlords keep properties in good condition, an important issue with our increasingly cold and wet weather.
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