Landlord News

RLA Praises Government on Avoiding “Green Tax” for Tenants

Rose Jinks - December 21, 2017

The Residential Landlords Association (RLA) is welcoming the Government’s decision to moderate the amount that it expects landlords to pay for energy efficiency improvements on their properties, in order to bring them up to an Energy Performance Certificate (EPC) rating of at least E.

This requirement comes into force as part of the Government’s new Minimum Energy Efficiency Standards (MEES) for new lets and tenancy renewals from April 2018, and for all residential lets from April 2020.

Original Government proposals stated that landlords would be required to pay up to £5,000 per property upfront to meet the new MEES. In a new consultation, ministers have followed the recommendations of the Residential Landlords Association (RLA) and cut the limit to £2,500.

The RLA is pleased that this could help to avoid a “Green Tax” on tenants, as landlords would pass costs onto them in the form of higher rents.

While the cap has been lowered, the RLA is calling for changes to the flagship scheme for tackling fuel poverty.

Under the Energy Company Obligation (ECO), large gas and electricity suppliers are obliged to help households with energy efficiency measures.

Analysis by the RLA has found, up to June 2017, just 14% of all funding under the ECO scheme was spent in the private rental sector, despite the sector representing 20% of all households and also having proportionately more older properties than other sectors.

With 43% of private rental homes having solid walls – more than any other housing type – fuel poverty is worse in the private rental sector than in any other tenure.

The RLA is calling for a portion of funding under the ECO to be ring-fenced to recognise the unique challenges in the private rental sector. It also wants measures recommended on an EPC to be tax deductible when carried out.

Richard Jones, the Policy Consultant at the RLA, says: “The Government has clearly listened to the RLA and cut in half the original cap on how much landlords would be expected to pay for energy efficiency improvements. This is welcome news for tenants, as it will mean costs being kept down.

“However, the RLA still has concerns that the Government is proposing to abandon the principle that the landlord should not have to pay the cost of the work upfront.”

He adds: “We recognise the importance of tenants living in warm homes. That is why it is vital that the funding is available under ECO to make improvements to their properties.”