Landlords forced to go green

Landlords are soon to be projected into the vanguard of saving the environment as proposals from the Energy Act 2011 come into force. 

The Energy Act introduced the much maligned Green Deal for landlords which most commentators have hailed to be a disappointing failure.

Landlords face a legal requirement by 2018

From April 2018, landlords will be legally required to raise the energy efficiency of rental properties to at least "Band E" levels of energy efficiency. Estimates are that this will involve significant work to over 450,000 properties which currently fall into bands F & G to bring them up to the higher standards.

A DECC spokesman said: "There will be no upfront costs to landlords so it’s not going to cost them thousands. Landlords can obtain money through the Green deal, eco or other subsidies so they don’t lay out money upfront. Depending on what improvements the property needs would also determine how much it will cost."

Landlord Energy Saving Allowance (LESA) ends 2015 

Will extra costs stack up for landlords?

The reality is that these works could cost landlords thousands of pounds for additional insulation and new boilers amongst other measures.  Many landlords remain unconvinced that the thousands of pounds of investment will ever be recouped in the capital value of their buy-to-let property. 

These expensive works will generally only result in small efficiency savings and reduction of energy bills by tens of pounds and therefore are uneconomic in all but the very long-term.  Tenant groups argue that tenants foot the cost of higher bills and are unable to act because the insulation and the energy efficiency of the boiler is a landlords responsibility. 

Who's right?