Members of the House of Lords have stated their worries about the Green Deal, due to take effect this October, and how it could affect private landlords and tenants.
Opponent Lord Grantchester claimed that the scheme could cause a “two tier market”1 in which some properties become difficult to rent out or sell.
He states the Green Deal’s repayment method, with landlords taking out loans upfront to improve their properties and tenants repaying via utility bills, as the cause for this possibility.
The higher utility bills may not be acceptable for the present tenant, and future occupiers, says Lord Grantchester.
He says: “Private landlords are concerned that they would be left with the bill and no tenant.”
He requested the Government to change the deal to give landlords the opportunity to repay the loans directly, and avoid tenants leaving.
From 2018, properties with Energy Performance Certificate ratings below E will not be permitted for let, and from 2016, tenants will have the right to demand energy efficiency improvements to their rental accommodation.
Lord Grantchester says: “The private rented sector is hard to engage with and the cost of improving these properties is likely to be greater than anticipated.
“Improvement works may be more problematic with 40% of housing having been built pre-1920 and 20% of tenants being assessed as living in fuel poverty.
“The whole edifice of the Green Deal looks precarious around these difficulties.”1
Labour member Lord Whitty believes that it will be more efficient for the Green Deal to be provided by landlords.
Lord Marland, for the Government, says: “In the private sector things are not going as we hoped.”1
The Residential Landlords Association (RLA) is calling for landlords to have the flexibility to access the Green Deal, but pay the loans back themselves.