Energy Efficiency essential for Buy-to-Let landlords

Energy Efficiency essential for Buy-to-Let landlords

Britain's drive for energy efficiency has received another boost, as the government introduces new legislation that makes it compulsory for landlords of energy inefficient properties to make appropriate adjustments or face a ban. While many landlords may cringe at the potential expense involved in upgrading, just one or two alterations might be all that's required for them to bring their to property to the required level, saving themselves and their tenants significant costs in the long-term.

UK homes rate poorly in energy efficiency

The Mayor's Climate Change Mitigation and Energy Strategy aims to reduce London's carbon emissions by 60% of 1990 levels by 2025. Key to this goal is improving the energy efficiency of homes in the UK, where 10% of the 4.2 million privately rented homes currently fall below the E-rating. The Guardian reports that UK homes are among the most expensive to heat, and that they have the highest level of fuel poverty out of a dozen comparable EU nations.

This is largely due to the age of many UK homes, with a large number being built during the Victorian or Edwardian era. According to the Department for Energy and Climate Change, 65% of private rental properties rated in the F and G categories (the two lowest) were built before 1919.

The new legislation will take effect in April 2018, from which point on landlords will be required to ensure that their property qualifies for an E rating at the very least. Tenants’ rights to energy efficiency will come into effect even sooner than that, as from 2016 onwards tenants will be entitled to request that their landlords make the necessary improvements to the property. Landlords will only be able to refuse if the request is termed “unreasonable”.

However, landlords need not fear exorbitant expenses. In many cases, it may not be necessary to carry out significant alterations to bring the property above the required level, with the Department for Energy and Climate Change reporting that 40% of properties could be lifted above the E category just by having loft insulation installed (poor insulation is one of the primary causes of energy inefficiency in UK homes). Furthermore, landlords will not be required to carry out improvements unless there is a grant available under one of the related government schemes, such as the Green Deal finance initiative.

Reducing energy bills

Many home owners are not even aware of the potential cost savings from having their homes upgraded from an F or G rating to an E, but the difference could amount to around £700 to £ 1,200 in heating bills. Around a million tenants are already paying £1,000 more than the average energy bill per year due to poor insulation.

As such, the new law - which has been called the most significant legislation aimed at improving building stock in the UK in years - will play an important role in meeting the UK's energy efficiency target and bringing about significant cost savings for tenants throughout the UK. Meeting the requirements will also make it easier for landlords to find tenants.

photo credit: Light Bulb No. 1 via photopin (license)

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