As a buy-to-let landlord, have you familiarised yourself with the new laws that will be coming into force regarding the energy efficiency of your properties? From 2018 it will be illegal to rent properties that are the least energy efficient, which will be those with an F or G efficiency rating; these occur more frequently in the private rental sector than either those homes owned by their occupants or let through housing associations or the council. However, even before then landlords will be required to meet tenants’ requests for energy efficiency measures to be put in place; this will take effect from 2016.

Improved Energy Efficiency

Improved Energy Efficiency

The extent of the problem

This is set to affect just over 11% of homes in the private rental sector, which reflects the fact that many do not have basic insulation measures in place. Only 38% of these rented properties have cavity wall insulation compared to 63% of social housing. While use of double glazing is widespread, 12% of homes rented by private landlords do not have this fitted. With the number of buy-to-let landlords growing, as a result of taking advantage of the continued demand for rental properties, the impending requirements for the energy efficiency of a house may be a consideration when firstly deciding to pursue this business venture and secondly the properties purchased.

Not all bad news

However, as a landlord you may be entitled to financial assistance through the Green Deal scheme to carry out the necessary upgrades on your properties. A Green Deal assessment on the houses you rent will determine what measures are appropriate and whether these can be funded through the grants that energy suppliers are making available to the scheme. If so, you will receive a loan to spend on the recommended improvements such as insulation and new boilers, so you do not need to pay upfront for the energy efficiency measures; the loan is repayable through your electricity bills. Once a Green Deal Plan has been drawn up and the improvements made, not only will your tenants be warmer, but you are set to gain a number of benefits. The energy bills for your rentals will be lower, tenants will be attracted to your properties, you will be able to charge more per month to those renting, you are less likely to receive complaints from tenants and when you come to resell the properties you will receive a greater return.

Whether you see the initiative as welcome or not, there is no escaping the fact that you will need to comply with the new rules as a landlord. With five years to make the necessary energy efficiency upgrades, that leaves you plenty of time to make sure you stay on the right side of the law.