Another excellent article from our regular guest blogger, Ben Reeve-Lewis, this time on the advantages of green landlording.
Energy efficiency and grants for landlords
So with Grant Shapps announcing the end of HIPs and the increased importance of EPCs, it is a timely opportunity to look at landlords and the environment.
Do you consider yourself a bit of an environmentalist? Concerned about doing your bit for global warming? (Incidentally I don’t see any signs of global warming in London this week, I had to put my coat on this morning….what’s happened to June?)
Or do you worry about what it would all cost, or even how renting your property out as an environmentally friendly home makes any difference at all?.
In fact there are several advantages to becoming a greener landlord, that should be of interest to even those of you who believe that global warming is a myth and just earth doing it’s periodic ‘Thing’.
There are grants available for environmentally friendly housing works and even tax relief on certain elements of it.
The UK is committed to an 80% reduction in carbon emissions by 2050 and housing has been earmarked as an area where reductions will have to be made to offset higher emissions in areas such as aviation.
New builds already face strict regulations through the Code for Sustainable Homes and the government’s aim for all new homes to be zero carbon as soon as 2016. However, even by 2050 the vast majority of homes are going to be older than the current crop of new builds
Energy Performance Certificates
EPCs were introduced from October 2008 to help improve the energy efficiency of buildings. Private residential landlords are legally required to provide an EPC.
The advantage for a would be tenant is that they can make an assessment of what the property is likely to cost them in terms of heating and lighting bills. The better your EPC rating is the more attractive your property will seem.
The possibility is there for charging a higher rent, offset against the saving a prospective tenant could make against utility bills
The Landlord’s Energy Saving Allowance.(LESA)
The tax man doesn’t do much to encourage the private landlord, or for that matter, any other small business person trying to play it straight (and yes, that is me airing a personal whinge) but LESA is an advantageous tax break that many private landlords are unaware of.
It is a tax break payable even if you let property abroad.
A landlord can offset £1,500 per dwelling. Note that this is not per building so if you own a building with 3 flats in it you can offset £4,500, on certain types of energy efficient works. Previously this tax break only applied per building
You can claim LESA on the following:-
- Cavity wall and loft installation put in after 6th April 2004.
- Solid wall insulation put in after 7th April 2005.
- Draft proofing and hot water system insulation installed after 6th April 2006.
- Floor insulation installed after the 6th April 2007.
This tax break is available until 1st April 2015.
Warm Front
In England if you have tenants claiming certain benefits they may qualify for Warm Front payments.
Warm Front is a government scheme introduced to try and tackle fuel poverty and at the same time improve thermal efficiency in properties occupied by vulnerable households.
Although this scheme is aimed specifically at improving the lot of tenants there also some distinct advantages for landlords in working alongside tenants.
Grants of £2,700 are available or even £4,000 if the dwelling has oil fired central heating. However the grant application must be made by the tenant because eligibility for Warm Front is welfare benefit related.
In Wales there is a scheme called the ‘Home Energy Efficiency Scheme’, which offers grants of up to £3,600 in similar circumstances.
There aren’t too many property improvement grants out there these days so the wise landlord will snap them up where they can get them.
Feed In Tariffs
FITs have been available since the 1st April 2010.
Photovoltaic systems…..that’s solar panels to you and me, have been available for many years, even the tiny ones used on calculators but with fuel bills rising all the time why do so few people stick them on their roofs?
Under the FIT energy scheme householders who generate their own electricity through solar panels and wind turbines can receive regular payments from energy suppliers.
The scheme guarantees a minimum payment for all electricity generated by the system and a separate payment for any excess electricity exported to the grid. These payments are in addition to savings made on bills by generating electricity from renewable energy systems.
You can’t get a grant for installing renewable energy systems but there are tailored loans available AND Feed In Tariffs are designed so that overall you make more monthly income from the tariff than you spend on monthly loan payments buying it in.
There are 3 ways that you save money:-
- Generation Tariff: Which is a set rate paid by the energy supplier for each kWh of energy you generate through your chosen system.
- Export Tariff: You will receive a further 3 pence per kWh of energy you export to the grid of your energy supplier. The export rate is the same regardless of which renewable energy system you have in place.
- Energy Bill Savings: Obviously if you are producing your own energy you don’t have to buy it in.
Want to know more?
Check out the Energy Savings trust (EST). this is a government funded non profit organisation that can provide free impartial advice on all matters related to being a green householder or landlord.
They keep a database of grants and the like being offered by government, local councils and energy suppliers.
Their website is here www.energysavingstrust.org.uk
For those landlords based in London the London Landlord’s Accreditation Scheme is currently working on a Green Landlords badge that aims to help with access to these advantages mentioned in this article.
Once securely in place, the more members they have the greater influence they can have on government policy in this area.
If you know that the tax breaks and the grants are out there why not take advantage of them?
Ben Reeve-Lewis
About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all
Do you know of any schemes or grants not covered by this article? Or do you have any other comments or suggestions? Please leave a comment below, we would love to hear from you.