Improving your rental property’s Energy Efficiency rating with a Government Grant
We believe everyone should be able to live in a warm, and energy efficient home – regardless of whether they’re privately renting or if they occupy a home they own. Not only does this help keep monthly fuel bills in check; but homes which allow heat to escape are damaging the environment with excess carbon emissions polluting the atmosphere.
Unfortunately for a variety of reasons, privately rented homes are more likely to have a lower energy efficiency rating than any other tenure type in the UK. This is why improving energy efficiency standards in the PRS has been a key Government target for many years.
Ever since 2016 it has been a requirement that a new tenancy can only be offered if the property has an energy efficiency rating of at least an E; and the Minimum Energy Efficiency Standards (MEES) was extended to existing tenancies in 2018.
There are exemptions. One of the exemptions is where the cost of increasing the energy efficiency rating of a property will cost more than £3,500 to implement.
The Government recently published a consultation to seek views on a proposal to increase the minimum level of energy efficiency for rented homes to ‘C’. If you would like to share your views on the impact a change such as this would have on landlords, the consultation is open until 30th December. You can find the link for this here
Until now, there has been little in the way of practical support for landlords who either have to, or want to, improve the energy efficiency rating in one of the properties they rent out.
This is why we welcome the recently introduced Green Homes Grant.
The Green Homes Grant will make it cheaper for a landlord to make improvements to an investment property, and under the scheme, landlords could be entitled to receive a grant worth up to two thirds of this cost.
Although the headline announcement is that homeowners can claim up to £10,000, this full amount is only available to low-income households where homeowners are receiving certain benefits. For everyone else, including landlords, the maximum grant available is £5,000. Therefore, in order to benefit from the maximum pay-out, then the work needs to cost at least £7,500.
The good news is that this scheme allows for a range of improvements to be made, for a total cost which is more than double the amount that permits a private rented home to be exempt from complying with the MEES regulations. So, a landlord with an exempt home could improve the energy efficiency rating of their property for a much smaller investment.
Whether your property is currently exempt, or you’re hoping to prepare for any future change in regulations – now is the perfect time to plan your energy efficiency modifications.
But, as you’d expect with initiatives such as these, there are some things you need to be aware of.
The work must be undertaken by a certified, Government-registered tradesperson, who holds the TrustMark quality assurance. Additionally, if the work is a renewable energy project, then they must also be a member of the Microgeneration Certification Scheme.
The scheme is only available for a limited time, and any grants awarded must be used by 31st March 2021.
Part of the work completed must be what is called a primary improvement; which means it must be either:
- Insulation; or
- Low carbon heating
Once the primary improvement is in place, then you can apply for an additional secondary improvement measure. Secondary improvement measures include:
- Draught-proofing
- Double- or triple-glazing
- Energy efficient doors
- Heating controls
- Hot water tank insulation
It is important to note that a grant won’t be awarded for a new-build property which has never had an occupant.
There are some additional considerations to bear in mind.
Firstly, your preferred primary improvement measure - such as solid wall and loft insulation, or the installation of a biomass boiler or hybrid heat pump – must be completed before you can apply for the grant for one of the secondary improvement measures.
Secondly, the Green Homes Grant fund ‘pot’ is limited to £2 billion, which whilst a substantial investment, it does mean that the estimated 600,000 available vouchers could be fully allocated well in advance of the 31st March deadline.
Therefore, if you want to benefit, we advise you to act today – the link to more information is here
You need to get three quotes from approved tradespeople to install one or more of the primary improvements. There are reports that qualified and approved tradespeople are in demand at the moment, and so getting an immediate quote may not be so straightforward in some regions. Do persevere though as we understand that record numbers of new tradespeople are applying to become part of the accreditation scheme.
However, if you don’t qualify for the grant, don’t be dismayed. There are still a number of measures you can take to improve the energy efficiency rating of your rental property which could cost less than the landlord contribution to the Green Homes Grant but will still improve your property’s energy efficiency.
Often an EPC rating can be improved by installing some of the so-called secondary measures, such as fitting a draft excluder to the front door. Installing heating controls such as Nest or Hive can cost less than £200; meanwhile, a jacket for your hot water tank can cost as little as £20.
The Government’s Green Homes Grant is certainly a step in the right direction, and we hope the scheme will help landlords ensure their tenants can enjoy the benefits of living in a more energy efficient home.