If you’re a buy-to-let landlord with a less energy efficient property you may have to pay up to £5,000 to bring your investment property in line with ‘green tax’ changes.
In a move that could potentially affect around 330,000 investors, loans for improvements to boost energy efficiency will cease to exist from 2018. Until recently landlords could apply for loans from the Green Deal scheme for improvements, which are then repaid by tenants who benefit from lower bills. However, the new Department for Business, Energy and Industrial Strategy is proposing owners provide the money for measures such as new boilers, cavity wall filling and insulation.
From April 2018, owners must raise the energy efficiency of homes to at least Band E. More than 330,000 homes in bands F and G, the worst-insulated, need major work. The target has been introduced by the government in an effort to save households around 11 per cent on their energy bills, however many are warning that that the costs of energy improvements will now be passed on to tenants.
The Rental Landlords Association is calling for a specific allocation under the ECO, scheme to support improvements in the private rented sector.
RLA Policy Consultant, Richard Jones, has said:
“Whilst we all want to see improvements in the energy efficiency of homes to rent, that cannot come at the expense of driving up rents. The Government’s proposals will amount simply to another tax on tenants.”
Commercial landlords will need to consider their property portfolios to make sure they fit within the new regulations and, if they don’t, make changes before the deadline of 1st April 2018.