Landlords thinking of upgrading their homes under the Government “Green Deal” may think again after a leading University survey cast doubt on the financial savings the improvements can make.
Property investors with an interest in landlord insurance have been told they must ensure their portfolio must only include homes that fall into the first four categories of energy efficiency if they want to rent them out to tenants once the Green Deal is in place. The news was tempered by the fact that landlords should be eligible for cheap loans to carry out the work that would save them money in the long term. However, experts from Bath University are seriously questioning the amount of savings the improvements will make.
The study investigated how energy efficiency measures advised by the Government would stack up on a variety of different types of housing typical of those in the UK. One family living in a Victorian terraced house installed the majority of the measures recommended in the Green Deal including solar heating, double glazing and floor and loft insulation. The improvements cost £50,000 and according to government figures should have realised savings of £1,139 a year, in fact the savings amounted to just £269 a year. A semi-detached home built between the two world wars saved just half of the predicted amount. In all just two of the seven different types of homes monitored registered savings in line with government predictions.
Other studies seem to reinforce the University findings. A study of over 100 homes in Sunderland found savings were just 60% of those forecast while an official study on homes in a London suburb now predicts those that borrowed money for the improvements over a 25 year period will face higher repayments than the savings they make in energy.
Luciana Berger, Labour Party climate change spokeswoman, said: “Before anyone takes out the Green Deal they have a right to know how much it will cost them and how much they will save. Relying on guesswork just isn’t good enough. If people are promised savings which never arrive, they will think the Green Deal is a con.”