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Energy company team up with landlord group to launch private sector Green Deal scheme

Holders of landlord insurance policies across the UK will this week get the chance to take part in the first contracts of the Government’s much vaunted “Green Deal” that apply to homes in the private rental sector.

A programme jointly undertaken by the Residential Landlords Association (RLA) and Enact Energy will see landlords of some of the draughtiest, dampest and coldest homes in the UK offered the chance to take part in an upgrading programme that will cover over 10,000 homes and cost £100 million over the next five years. Landlords interested in the scheme will benefit from a complete energy efficiency upgrade service including an initial property assessment followed by the implementation of the necessary upgrades identified to bring the home up to standard. The cash will not have to be found up front by the landlord but will come from grant funding and Green Deal finance.

The loans will be attached to the homes for 25 years and will be repaid via the energy bills paid by tenants. In all circumstances the surcharged energy bills will be cheaper than they would have been without the energy efficiency improvements. Although the scheme has been launched this week Green Deal finance won’t be fully available till the spring of next year.

Chairman of the RLA, Alan Ward, said they had undertaken the initiative as they feared many landlords would back away from the Green Deal because they didn’t understand it. He went on to say: “Green Deal and Energy Company Obligation (ECO) offers landlords a significant opportunity to improve the energy efficiency and in some cases the appearance of their property, with the added benefit of grant funding and long term finance. We aim to be the major service for Green Deal and ECO for the private rental sector and are planning to help up to 10,000 landlords to upgrade their properties over the next five years.”

Green Deal innovator believes that private landlords will be better off

Energy efficiency specialist Enact Energy believes that private landlords throughout the United Kingdom could be among the biggest beneficiaries of next year’s Green Deal.

Enact Energy was named earlier this year as one of the Green Deal pioneers by the Department of Energy and Climate Change and the company will be one of the first with the power to offer landlords home improvement projects sponsored by the Green Deal Plan or grant funding through ECO (Energy Company Obligation). They firmly believe that landlords will be able to use the Green Deal to make significant energy efficiency improvements with little or no upfront costs to themselves. The tenants would then pay off the loan costs through their bills. The most common of the 40 types of energy efficient upgrade work is expected to be insulation, heating upgrades, renewable energy products such as solar panels, and double-glazing.

Enact dismissed concerns raised by the RLA (Residential Landlords Association) that the Green Deal will lead to tenant resistance because they will resent having to pay off a landlord’s loan via higher energy bills. Enact feel that that their opinion does not take into account the Green Deal’s Golden Rule, which should be clearly communicated to every tenant in the UK. The Golden Rule is that work carried out as part of the Green Deal must not cost more than the expected financial savings. Tenants should be helped to understand that even though they are paying for the improvements; their bills will still be less than they would have been before. However, some work such as double-glazing is expensive to have installed relative to the energy savings it delivers. In these cases, the landlord will have to pay an upfront payment towards the cost of the work on their property. However, landlords should always inform their property insurance providers when undertaking projects such as installing solar panels or changing the layout of a building.

Enact Chairman, Adrian Wright, said “Landlords will need the permission of the tenant to apply the loan to a property, so works will only be able to go ahead if they agree – a communication challenge that landlords must rise to if they are to see their properties benefit from the Green Deal. Alternatively, works can be installed during tenant void periods negating the tenant permission obstacle. Whilst it is the tenant who pays the loan, it is also the tenant who will benefit from the energy savings so through the Golden Rule they should be no worse off and will benefit from a warmer home with lower energy bills.”

Tenants Move into New Council Eco-Friendly Bungalows

A Staffordshire family of three are delighted with their new home which has been built by their council to help meet a chronic shortage of housing for those with special needs. Hannah and Stephen Lowe have moved into the bungalow with their 16-year-old son, Josh. Their new home is one of seventeen eco-homes built in the area as part of a £1.8 million project to meet the demand for two-bedroom bungalows.

Building work on the bungalows finished in April and all of the homes which come complete with solar panels, under-floor heating and wet room bathrooms, have been allocated to those who need them most. Sixteen year old Josh suffers from hypoplastic anaemia from inadequately functioning bone marrow and at times needs a wheelchair to get around; his parents needed a home which could be adapted to his needs. The bungalow is ideal because he no longer has to negotiate stairs and can also manoeuvre his wheelchair through the wider doorways and hallway.

Mr Lowe said: “We had lived in a town house in Burslem for 14 years and it was very difficult for Josh to use the stairs. We were also spending up to £800 a quarter on electricity, so we really appreciate having a bungalow like this. It also benefits us in terms of it being eco-friendly. Josh’s condition means he needs to be kept warm and we are able to do that now at a cheaper rate. We are glad we have somewhere to call our permanent home.”

The new homes have been purpose-built for elderly and disabled residents and are the first properties to be built by Stoke-on-Trent City Council for twenty-five years. The innovative design of the properties has not adversely affected property insurance premiums and landlord and tenant alike are delighted with the finished homes. The concept behind the building scheme was not to create a new community but to bring families into existing ones. The overall view is that the plan has been a resounding success.

New Alliance wants laws which will protect tenants in a cold home

A coalition of 15 organisations have urged the Government to make it illegal for any landlord to rent out a poorly insulated home until they have been made more energy efficient.

Organisations that include Friends of the Earth, Citizens Advice and Age UK are very concerned about the increasing number of poorly maintained properties in the privately rented sector. They report that nearly 20% of private tenants are currently living in fuel poverty and are unable to heat their home properly. The groups say that a cold home could impact on health, putting the elderly at greater risk of catching diseases which are costing the NHS around £859m per year.

The organisations are asking the Government to introduce minimum energy efficiency standards for landlords renting private properties. They also want the landlord to have advice and financial help in getting the homes up to a better standard, and for the tenant to get reliable information about the energy efficiency of the property before signing a contract. Most landlords are diligent in their search for cheap landlord insurance, applying the same effort in seeking out energy efficiency advice and passing it on to their tenants could prove to be just as rewarding.

Friends of the Earth’s climate campaigner, Dave Timms, said “It’s a disgrace that millions of vulnerable people live in poorly insulated and cold homes. The Government should introduce a minimum energy efficiency standard for private rented homes so they are better insulated and cheaper to heat – this would protect tenants from high fuel bills and ill health, create jobs, save the NHS money and cut carbon emissions.”

The Government’s Fuel Poverty Advisory Group, say that during the past six years utility bills have gone up by 125%,  and this has been devastating for the fuel poor.

Senior Liberal Democrat backbenchers such as Charles Kennedy and Andrew George have signed a Parliamentary motion for minimum energy efficiency standards for private rented homes. Labour leadership contender Ed Miliband is also in favour of a new regulation.