Landlords and Tenants are now able to access a new lending fund to improve the energy efficiency of their homes and properties. Speaking today at the Ecobuild 2014 conference, the Secretary of State for Energy and Climate Change, Ed Davey MP, confirmed the extension of Green Deal financing to the private rented sector in England, Wales and Scotland.
Being able to take out a Green Deal Payment Plan can help landlords bring the energy efficiency of their properties in line with forthcoming EU requirements. EU law will require landlords to make their properties rate E or higher on Energy Performance Certificates by 2018. Tenants will have the right to request improvements to their properties from 2016. Some 390,000 private rented homes have energy standards in band F and G, according to the new English Housing Survey published this February.
The extension of the Green Deal to the private rented sector has been welcomed by the National Landlords Association and the Residential Landlords Association. But tenants will have to agree to any Green Deal Payment Plans on the property they rent through considerable consumer protection built into the scheme.
Commenting on the extension of the GDFC funding package to the private rented sector, Mark Bayley, Chief Executive of the Green Deal Finance Company, said: “Britain is moving towards a rental culture. Landlords and tenants now have a chance to make homes more energy efficient for minimal upfront cost. A Green Deal Payment Plan offers the chance for both to work together to improve their properties and homes: the landlord will be able to improve the EPC of their property and the tenant will be protected from rising energy prices through new home improvements.”
Mark Bayley went on to add: “Green Deal Payment Plans are a win win for tenant and landlords who want the same thing: a more energy efficient property and protection against rising energy prices The void that sometimes occurs between old and new tenants is a perfect time to carry out these improvements”.
A Green Deal Payment Plan is a loan, but not like any other. Unlike many high street lenders, the GDFC does not give each consumer a different APR for the same loan. Rates are universal and fixed and competitive at 6.96 per cent interest with fixed charges, and over long periods of time for up to 25 years. High street lenders can advertise lower APRs because current advertising and credit marketing regulations mean that the best headline rates need only be available to 51 per cent of successful applicants. GDFC’s rates are available to 100 per cent of successful applicants and an estimated 83 per cent of the adult population.
The Green Deal is governed by the “Golden Rule” which means that the repayments by the electricity bill payer should be less than or equal to the typical savings made by reducing energy usage. Tenants will be much better protected against rising utility bills because of the energy efficiency improvements to their home or flat and the home will also be more comfortable.
The GDFC is currently processing c£ 6.9m in payment plan applications for home owners and 27 firms are currently selling Payment Plans.