NRLA Chief Executive Ben Beadle on the Government’s new energy efficiency plans for the PRS – and why you should take up its Green Grant funding while you can.
“With Covid still dominating both the headlines and our day to day existence, it is easy to forget that life goes on.
It is with this in mind that this month we turn our gaze to new Government plans to bring in dramatic energy efficiency targets for landlords.
The Government used the launch of its new Green Grants scheme to announce plans to raise minimum energy efficiency standards for rental homes to C grade or higher from April 2025.
As of this year all rental properties (other than those with valid exemptions) must have an EPC rating of E or higher to be legally rented out.
Under the new proposals – currently out for consultation – new tenancies would need to meet the new standards by 2025, with all landlords needing to hit the targets by 2028 (unless they have a valid exemption).
The cost cap proposed for landlords £10,000 – much higher than the current £3,500 level.
As a landlord myself I understand the need for improvements across the sector, and the benefits that come from energy efficient homes, to landlords, in that they are more attractive to potential tenants, and to renters as they mean cheaper bills.
However, any changes could mean significant challenges for some landlords when it comes to getting their homes to this level. Those hit particularly hard being those with older properties - particularly pre-1919 homes - or those that are off-grid, or in areas where the cost of upgrades is disproportionate to property values.
In all, a third of homes in the PRS were built before 1919 according to the English Housing Survey. These are likely to have solid walls, making insulation much more difficult. Listed status can also affect landlords’ abilities to make changes.
Green Homes Grants
Our first advice to landlords would be to take advantage of the Government funding available to make energy improvements now.
Green Homes Grants are the first move by Ministers to incentivise energy efficiency improvements in rental homes. The scheme sees the Government provide vouchers that will cover up to two thirds (67%) of the cost of certain improvements up to £5,000.
Improvements are split into primary and secondary categories and you must qualify for primary measures before you can apply for secondary measures. The installer will receive payment from the Government for the costs covered by the voucher.
However, if you want to take advantage of this funding – which is available in England only - you will need to move fast.
Not only is the time period set by Government tight, ending on March 31, 2021 – by which time work needs to be completed - there could also be additional issues finding accredited tradespeople people to do the work, with more and more areas entering Tier 2 and 3 coronavirus lockdowns, meaning greater restrictions.
The system may seem confusing, but it is not often government cash is made available in this way and it is worth remembering that although there is a cost to you as a landlord the improvements will still need to be made at some point when the funding is gone.
As the cash is available in England only we have approached the Welsh Government to replicate the scheme there.
Next steps
My colleagues in our policy department are currently working on our response to the Government consultation, which closes on December 30.
But, whatever the outcome, it is clear that raising standards when it comes to energy efficiency is a direction of travel the Government is firmly committed to.
It is looking to move to ‘low carbon-heat ready’ in the private rented sector by 2030, which means making as many changes to the fabric of buildings as is possible in anticipation of the phasing out of gas boilers, as has already been announced for new-build homes.
In all the Government has committed £9.2 billion in its manifesto to energy efficiency measures.
We are now campaigning for a share of that investment to support landlords in the private rented sector to make changes, as well as ensuring any targets set for landlords are fair and achievable.
If the Government opts to progress with its plans to raise minimum standards there needs to be clear, long-term proposals for the trajectory of change to go alongside a package of funding for works.
This will help us landlords plan and budget for changes and improvements to our properties over the next 10 -15 years.
Commitment to improvements
Statistics shows that standards in rental homes have improved dramatically over the last decade thanks to the hard work and commitment of landlords.
Figures from the latest English Housing Survey show that the number of rental homes with an energy-efficiency rating band of A–C has increased from 11.6% in 2008 to 32.6% in 2018.
Things are moving in the right direction and these figures are testament to landlords’ desire to improve their properties and make them warmer and more efficient. What we need now is the Government support to back that up and take it to the next level.”
More information
For more information on the Government plans, you can access the Government consultation documents here.
For help in navigating the application process for the Green Grant scheme the NRLA website now includes a step-by-step guide to accessing the grants for members. The association also held a webinar on the issue, which can be accessed by members here.
The NRLA will be holding a second webinar on the issue on December 9. To register keep an eye on our webinar pages here.
To watch a video on the grants process check out your main Bulletin page.