Research at the beginning of the year revealed that around 60% of the UK’s private landlords intend to expand their property portfolios in 2014, but how many will take energy efficiency into account when choosing a property?
In 2011, when the Green Deal was first announced, plans to introduce energy efficiency standards for private landlords were outlined. These included a proposal that from April 2016 landlords will not be able to refuse reasonable requests from tenants to improve their property. In addition, from April 2018 it will become illegal to let a residential or commercial property with less than an ‘E’ energy efficiency rating.
If the proposed Green Deal legislation comes into effect as planned in 2016, a property’s green qualities will become higher priority than ever – especially if the majority of investors continue to look at properties for long-term yields rather than short term gains. But with slow uptake on the Government’s green initiatives, it does not seem like energy efficiency is being considered as a profitable asset for landlords purchasing new buy-to-let properties just yet.
Of course, it’s not just new properties that will come under the scrutiny of the new energy laws. Landlords are also being urged to undertake energy saving measures for their current rental properties now.
Savills have estimated that around 682,000 rental properties will need to be improved by the 2018 deadline, and the Letting Agency joins other organisations in urging landlords to seek improvements sooner rather than later.
While these changes could be costly, the purpose of the Green Deal is to financially assist people to make improvements to their homes. Recently, Ed Davey, the Energy Secretary, announced two new multimillion pound schemes to help private landlords meet the new standards. One to help them insulate existing properties, and another to assist in the cost of making any new purchases more energy efficient.
Louise Butler, Head of Savills Surrey and Southern Lettings, urged landlords to take up the scheme, saying; “This assistance towards the installation of energy saving measures will not only help to ultimately increase the value and rental income of property but also reduce tenant’s bills providing them with warmer properties in which to live which are more cost-effective to heat.”
How long it will take the average landlord to sit up and take notice of their portfolio’s energy efficiency is yet to be seen, for now 2018 still seems like a long way off and few are rushing to take advantage of the Government’s offerings.