The RLA has called for landlords’ spend on mandatory energy improvements to be capped at £2,500 – half the figure proposed by the Government.
Under plans from the new Department for Business, Energy and Industrial Strategy landlords would have to fork out up to £5,000 to bring homes up to a minimum Band E energy efficiency rating or be banned from renting them out. The deadline is April 2018 for new tenancies and 2020 for existing ones.
However the Residential Landlords Association has warned this new ‘Green Tax’ could have a massive impact on tenants – pushing rents higher as landlords try to recoup costs.
In a survey of 342 members almost a quarter, 23% said they would have to increase rents to pay for the work. A total of 52% said they would be forced to sell off some of their F or G rated properties, with 65% of these looking to evict their tenants.
The RLA is now calling for the cap to be halved to £2,500 to minimise the impact on tenants and landlords alike.
A total of 330,000 buy-to-let homes, typically Victorian and Edwardian properties, will be affected by the changes.
Landlords until recently could apply for Green Deal loans to improve energy efficiency. These loans were then repaid by tenants, who as a result of the works were paying lower bills.
The new plans propose landlords stump up the cash themselves for improvements such as insulation, cavity wall filling and new boilers.
The Government proposed the £5,000 cap in a briefing to landlords – claiming that most will pay no more than £1,800. However, the RLA survey shows the real average cost to be £7,200 per property.
Richard Jones, RLA company secretary said: “The RLA would advocate a cash cap to be set at no more than £2,500 to protect tenants from excessive rent increases, without them benefitting from a reduction in their overall utility bills.”
The RLA wants the Government to make funding specifically available to PRS landlords, with a cash pot to help those with pre 1919 homes with solid walls. It is also asking for tax relief to be reinstated so that the costs of energy efficiency measures recommended on EPC certificates can be offset against income tax.
To read the full report, including the findings of our members’ survey click here.