What you Need to Know About the New Government Energy Efficiency Cap

The government is cracking down on landlords with properties that cost tenants more money to heat. The cap on energy efficiency expenditure has now been raised from £2,500 to £3,500. Let’s take a look at the previous cap on energy efficiency, and when the increase will affect you…

Landlords with Band F and G Properties Can’t Let Them Out

Since April 2018, landlords with properties rated F and G in the energy bands have been unable to let them out without making energy efficiency improvements to push them up into the E band. When the policy was first announced, the government offered a get-out-of-jail-free card to appease landlords facing large bills for the work. Landlords who were looking at costs in excess of £2,500 to add extra insulation and other energy efficiency measures were exempt from the upgrades, meaning their tenants had no choice but to live in a cold, draughty home that cost extra to heat.

This cost cap was much lower than industry experts wanted. Now, however, the government has done a U-turn and raised the cap on landlord expenditure for energy efficiency improvements. Landlords will only be exempt if their costs exceed £3,500. This new cap will come into effect in 2019. Despite this, tenant campaigners say the cap is still too low and there are too many tenants paying over the odds to heat older properties.

The Cost to Upgrade an Energy Inefficient Property in the Rental Sector

The Department for Business and Energy says it costs around £1,200 to upgrade a property to energy band E, which is the minimum allowed for rental properties. There are around 290,000 properties with an energy efficiency rating F and below, most of them older housing stock. Making essential energy efficiency improvements will help tenants save money on heating bills.

“Upgrading these homes so they are more energy efficient is one of the most effective ways to tackle fuel poverty and help bring down bills for their tenants, saving them £180 a year,” says Claire Perry, the energy and clean growth minister.

“This builds on our ongoing work to crack down on the small minority of rogue landlords and drive up standards in the private rented sector, including through our reviews of health and safety standards and carbon monoxide alarm requirements in the home,” added Heather Wheeler, minister for housing.

Funding Available to Help Landlords Make Energy Efficiency Improvements

There is funding available to help landlords improve the energy efficiency in their properties. If you are facing a big bill, check to see if there are any grants on offer from your local authority. Also, the Energy Company Obligation Scheme may be able to help.

It is worth pointing out that cold weather is one of the main contributory causes of death in the private rental sector. Tenants won’t freeze to death but being cold lowers the immune system and exacerbates other chronic health problems. Older and vulnerable tenants are particularly at-risk in colder properties.

As the World Health Organisation says: “…30% of avoidable winter deaths are due to people living in cold homes.”

Do you own older properties? Are you facing a big bill to bring them up to standard? Tell us more in the comments!