With details of the Governments Green Deal on housing energy efficiency still sketchy, many property investors with an interest in landlord insurance are still unsure just how the new regulations will affect them.
Homes under the spotlight
Landlords who have purchased business property insurance on housing projects over the last few years will already be aware of the necessity to get an energy performance certificate for a home where they intend to place tenants. The certificate rates the property on several levels, including energy efficiency, environmental impact, and energy use. At the end of the inspection which usually takes about 90 minutes the inspector will give the home a rating and also advice on where improvements can be made.
Many contributing factors in rating
The ratings go from A – the most efficient down to F – which is the most inefficient. Many factors can contribute to a home’s rating including walls, windows, heating and doors. However, the worrying aspect for many landlords is that the “green deal” will probably brand homes rated E and F, the two lowest grades, unsuitable for letting purposes.
Many landlords unsure of rating
A recent survey by the Association of Residential Letting Agents (ARLA) suggested that over 1 in 3 private landlords were unsure of their property’s energy performance rating while 1 in 6 believed their rental properties fell into the bottom two levels. If 16% of houses currently in the rental sector suddenly become untenable the problems for landlords would be dire, the consequences for the Government, disastrous.
Who will pay for improvements?
Although the Government’s proposal will not come completely into force until 2018, the uncertainty of what is demanded from residential landlords and the lack of clarity of where the funding to improve homes will come from is still leaving many uneasy. A spokesman for ARLA said the survey reflected the views of over 1500 landlords many of whom believed tax incentives would be an appropriate way forward to bring about property improvements. It is for certain that if the current demand for rented accommodation facilities continues through the next few years, panic buttons may well be pressed, not by landlords but by government departments wondering how the “green deal” will house a population who can’t afford to buy their own home.