Government policy to improve the energy efficiency of the UK’s housing stock will increase rents for tenants.
New laws mean that from 2018 it will be illegal to rent out property with the worst energy efficiency levels but the Residential Landlords Association is warning that having removed all support for landlords to fund this, this will raise rents for tenants.
Nearly a third of private rented housing was constructed before 1919 making them some of the hardest to treat properties for energy efficiency improvements.
With fuel poverty a bigger challenge in the private rented sector as a result, the RLA argues it is remiss that the government’s consultation, closing this week, on the future of the Energy Company Obligation makes no reference to the private rental sector.
The association says that despite ECO being designed to focus on fuel poverty, the consultation suggests extending the scheme to the already heavily subsidised social sector, which has newer housing stock and fewer tenants in fuel poverty.
Previously the government supported the buy to let sector in implementing energy efficiency through the Green Deal and a tax allowance. These have now ended and the RLA has been told landlords could potentially face having to pay up to £5,000 up front for improvements.
Coming on top of recent tax hikes from the Treasury it is inevitable that costs will be passed on to tenants in the form of higher rents. The RLA is instead calling for a specific allocation under the ECO, scheme to support improvements in the private rental sector.
“Whilst we all want to see improvements in the energy efficiency of homes to rent, that cannot come at the expense of driving up rents. The government’s proposals will amount simply to another tax on tenants” claims RLA policy consultant Richard Jones.