Green Deal is More to Consider than Just Free Insulation

Recent announcements for the government suggest that they would like to get tougher on landlords who own properties that are rented out which fall into the lowest brackets for energy efficiency. As part of the Green Deal repayments on the government loan for the work are made via the electricity bill. So in effect tenants are paying for the work.

According to the English Housing Survey, published earlier this month, 11.4% of homes in the private rented sector were rated F or G in 2011. By 2018 it will be illegal to rent a property with an EPC rating of E or below.

Long Finance Deals

In most cases the loan is stretched over many years, usually between 10 and 25. The loan stays with the property, even when it is sold. The government has said that it expects interest rates for the loan to be between 7.5% APR and 9.5% APR. Loans stretched over a very long term will end up being very costly. Selling a home with a Green Deal incentive attached can be off-putting to buyers, who are not keen on getting saddled with previous debts. If the tenant falls into arrears with the energy bill debt, they will be chased in the usual fashion via the energy provider.

Approved Installers

Assuming that the landlord would have to use approved installers, this would mean that the green additions will probably cost more then if the landlord were to make the improvements themselves. Approved partners are rarely competitive in pricing because they don’t need to be. Take up on the green deal has been much lower than expected. One factor in that may be because it takes far longer to get to a break-even return on any energy saving investment due to the initial high purchase expenditure.

What About Our Traditional Housing?

It should be remembered that much of our property in the UK is traditional houses, not newer builds. This is particularly true in rural areas where many properties are physically incapable of qualifying for higher bands, simply because of their construction methods.  In fact, some newer green incentives could damage listed property. Making property legally un-rentable, when people still want to live in them, does not help solve the housing crisis.

Another part of the Deal is that the government hope to force landlords to comply with the clause “landlords will not be able to refuse tenants’ reasonable requests for energy efficiency measures.” This of course begs the questions, what is deemed to be reasonable and how or where is that arguable in law, should it come to that? Surely if a landlord thinks the tenant is being unreasonable they would just evict the tenant.

A simple fact is that most homes can vastly improve their energy rating with better insulation, which is both simple and cheap to fit. So why bother with the Green Deal at all?



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