Green tax to hit landlords in 2018

'Green tax' to hit #landlords with £5,000 bill on buy-to-let homes| via @TelegraphNews https://t.co/pCmXcyV8mx

— Landlord Action (@LandlordAction) August 1, 2016

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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?

Green Deal Warning To Landlords

The Telegraph warns that one in ten buy-to-let properties will be unlettable in 5 years time unless landlords improve the energy efficiency of their investment properties.

The legislation is part of the 'green deal' recently introduced by the government as a way to encourage landlords to make energy improvements within their properties.  As I have recently discussed many landlords remain unconvinced by the so called attractions of the 'green deal'.  The sting in the tail remains.  Those properties which have the two lowest energy ratings will not be able to let out their properties by 2018.

Again, this brings to the fore the unfairness being exercised by government against private landlords.  Will home owners be prevented from living in drafty old mansions?  I think not.  Will housing associations or councils come under the same controls?

To read the full article follow the link.

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Green Deal Launches TODAY

Landlord looking to make energy efficient improvements to their buy-to-let properties will from today(28.01.13) in theory be able to access the cheap loans to make things like new boilers, insulation and solar panels happen.  There are currently 45 improvements that qualify for the new Green Deal scheme.  We have talked before about some of the threats and opportunities for landlords presented by the Green Deal.  From today we should be able to see these in the raw.

The scheme works with a visit by a Green Deal Assessor who makes a list of recommended improvements to your buy-to-let property (you don't have to accept any or all of them).  The Green Deal Assessor then quotes for the cost of the energy improvement works.  Once you have chosen a Green Deal Provider they will provide the landlord with a Green Deal Plan and the Provider will arrange for a Green Deal installer to do the work.  The costs of the Green Deal energy improvements rather than being paid for up front come in the form of a fixed interest loan where the costs are added to the electricity bill for the home.

Should Landlords Embrace the Green Deal?
All the above sounds great.  For a landlord you get your property improved at no upfront cost and the benefits come to the tenant in the form of a warmer more energy efficient buy-to-let property. In theory the improvements will be cost neutral to the tenant as the extra costs of the loan are offset by cheaper bills.  However, how true will this be?  What happens if the tenant lets for 6 months during the summer.  They will be paying the costs of the loan but given they probably won't be using the heating anyway there will be little or no savings in heating costs.  Will tenants elect for a property without a Green Deal surcharge.  What happens if the property is empty during a void period?  Then the loan cost falls to landlords.  There are many implications for a landlord and tenant presented by the Green Deal and we will be looking at them and landlords experiences over the coming months.

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Green deal - software glich

The 'Green Deal' is coming.

Landlords can already register online for the scheme but reports indicate that some of the vital software that is required to complete the assessment is not working correctly.  This means that despite the loans being available from January 2013 the vital assessment cannot be completed.

It would be interesting to about landlords experiences in trying to access the loans.  Has anybody tried and what have been your impressions?

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