Lettings bodies have welcomed the government's announcement to extend Green Deal finance to all landlords and tenants in England, Wales and Scotland.
The extension, revealed by Energy and Climate Change Secretary Ed Davey, has been well received by the RLA, NLA and others.
Until now landlords were excluded from taking out a Green Deal payment plan to fund energy efficiency projects aimed at making accommodation meet EU environmental standards which by 2018 require PRS properties to be rated E or higher on Energy Performance Certificates.
This specifically affects owner of the 390,000 privately rented units which were identified in last month's English Housing Survey as having energy standards rated as F or G - plus tens of thousands in Scotland, Wales and Northern Ireland, too.
The Green Deal is a scheme introduced in the early years of the Coalition Government to allow owners to install costly energy efficiency improvements without having to pay the full cost up front: instead there were various funding schemes - Green Deal payment plans - to encourage commercial sources to fund the initial outlay and recoup the expense via deferred payments, sometimes linked to the energy saving created by the improvements.
A Green Deal payment plan is a loan, and some of the 27 lenders involved with the Green Deal have been criticised for the relatively high interest rates attached to the loans.
Comments
I dont doubt that many landlords have welcomed the news that the government is extending Green deal financing to landlords and tenants as we fast approach implementation of the Energy Act 2011. However, in the rush to get finance to upgrade a property, landlords and their agents should not ignore the insurance implications. Upgrades to a property may well have an impact on its insurable value and if any property is going to be unoccupied for a period of time whilst energy-saving improvements are undertaken, then the landlords insurance policy may need to be amended to ensure there is un-occupancy cover in place for an adequate period of time. Apathy is not an option. Its going to be important to ensure that landlords and their agents keep their sums insured under review to ensure they are adequate for replacement and reinstatement in the event of a claim, and to be aware that work may need to be carried out in an energy efficient manner.