Fran Mulhall, Operations and Lettings Manager of GFW Letting, urban property rental specialists based in Newcastle upon Tyne, looks at the new regulations under the Government’s Green Deal initiative and discusses the impact they will have on landlords in the private rented sector.
“The Green Deal sets out definite targets that are designed to make the UK more energy efficient. As part of the Deal, specific measures that affect the private rental market have been put in place which will have a big impact on how homes are let to prospective tenants.
From April 2018, landlords will be legally required to raise the energy efficiency of private rented properties to a specific standard. The regulation means private landlords must have an Energy Performance Certificate (EPC) 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. For tenants, 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. According to the National Landlords Association (NLA), property owners could be facing bills of up to £9,000 to carry out the work needed to ensure their properties meet the new energy standards.
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. To avoid encountering problems, it’s important that landlords are given the right advice and guided through the new ruling to understand the impact on their investments and actions required to comply with the legislation.
This becomes even more critical given that, prior to the April 2018 ruling, there’s an important part of this legislation that, again, not 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 (GDHIF), where tenants and landlords can apply for financial support to help them make homes more energy efficient, is something that landlords should 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 (PRS) 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 – i.e. freeholder consent.
The role of the agent
With such key legislation changes, ever greater demands are being put on landlords. Choosing an appropriate agent to work with is therefore vital. 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.
With the new energy measures, diligent agents should be speaking to their clients now, making them aware of the legislation and explaining what action they might need to take and why. If any home improvements need to be made, a good agent should have solid, trustworthy relationships with key contractors and be able to make recommendations to their clients.
Article Courtesy of: GFW Letting