Letting agency warns landlords over Green Deal

Letting agency GFW Lettings says new Green Deal targets to improve energy efficiency will have a challenging impact on private sector landlords.

From April 2018 landlords will be legally required to raise the energy efficiency of private rented properties. This means private landlords must have an Energy Performance Certificate with an E rating or higher in order to issue a new tenancy for a property. 

This law will apply to existing leases from April 2020. 

GFW says that for tenants, naturally, the legislation is good news as it will reduce bills in poorly insulated homes where up to one million tenants are paying too much to keep warm. For landlords, however, it’s a mixed bag. 

“They might be able to get some financial support under the Green Deal or Energy Company Obligation via their tenants’ energy supplier to ensure properties meet the required standards, but given that nearly half a million UK homes fail to meet the required E rating they could be hit with thousands of pounds worth of bills” warns Fran Mulhall, GFW’s operations and lettings manager. 

One estimate puts the maximum cost at up to £9,000 per property. 

“As 10 per cent of privately rented properties currently fail to meet the new efficiency rules, this could leave many landlords with a big headache” warns Mulhall. 

To add to the issue, she says that, prior to the April 2018 ruling, there’s an important part of this legislation that few many landlords will be aware of. 

“From April 2016, private residential landlords will not be able to unreasonably refuse consent to a tenant’s request for energy efficiency improvements and must respond to any requests from a tenant in under a month. This means that if a tenant feels that their home could be a lot better insulated landlords, by law, must make appropriate improvements.”

The provision of the Green Deal Home Improvement Fund, where tenants and landlords can apply for financial support to help them make homes more energy efficient, is something that GFW advises landlords to familiarise themselves with, as in 12 months’ time they might start getting energy improvements requests from tenants.

There is, however, an ability for the landlord to seek exemption from this through the Private Rented Sector Exemptions Register. Such exemptions include where landlords can evidence that they have undertaken the improvements that are cost effective, within the Green Deal’s Golden Rule, or, for instance, where third party consents are refused.

GFW says choosing an appropriate letting agent to work with is therefore vital for landlords. 

“A knowledgeable agent does so much more than manage the advertising, leasing and maintenance of a property. They must appropriately advise and support landlords across the entire lettings process - providing timely, relevant information to property owners and guiding them through any key decisions and changes to the industry” says Mulhall.