Landlords urged to prepare for Energy Performance Certificates

Paragon Mortgages, UK specialist buy-to-let mortgage provider, has urged landlords to review the energy efficiency of their properties ahead of new energy performance rules being introduced later this year.

From October 1 landlords will be required to make an Energy Performance Certificate (EPC) available to prospective tenants as part of the lettings process. The EPC, which is valid for 10 years, will rate a property’s energy performance and make recommendations about how to improve the energy efficiency of the property.

Although landlords are under no obligation to carry out any recommendations made, prospective tenants could use the EPC as one of the factors to determine which property they choose to rent.

The certificates have already been introduced into the home sales process and could play a valuable role in boosting energy efficiency across the housing sector when they are extended to the private rented sector.

John Heron, Paragon Mortgages managing director, says: ‘If two properties are of a similar standard and rent level, then the tenant is likely to choose the property with the better energy efficiency.

‘Landlords already provide high quality rental accommodation, but if they are looking to make improvements to the energy performance of a property, now is a good opportunity. Fortunately, there is financial help for landlords and they should take full advantage of the grants available to them.’

Landlords and tenants can access a range of grants to improve the energy efficiency of their homes. Schemes include:

The Landlord Energy Saving Allowance

The LESA was introduced by the Government in 2004 and allows private and corporate landlords who pay income tax to claim back up to £1,500 per property for the installation of energy saving measures, including loft, cavity wall, floor, hot water system and solid wall insulation, as well as draft proofing. The scheme applies per property, rather than per building, so a house converted into four flats would be able to claim up to £6,000. However, the allowance does not cover holiday lets or resident landlords.

To claim the relief, landlords must include the expenditure as a deduction in their self-assessment tax return. For more information, landlords should visit HM Revenue & Customs at hmrc.gov.uk.

Warm Front

Grants of up to £2,700 are available to tenants of private landlords if they are in receipt of certain benefits to make insulation and heating improvements to a property. The landlord doesn’t have to make any financial contribution, only give permission to their tenants for the work to be carried out on the property. The tenant must apply for the grant and a Warm Front assessor will visit the property to suggest which improvements should be made. People entitled to the grant include householders aged 60 or over in receipt of income support, council tax benefit, housing benefit, job seekers allowance or pension benefit, and householders with a child under 16 also in receipt of the same benefits. For a full list of the type of tenant eligible for the grant visit warmfront.co.uk. This scheme is only available for households in England.

Local council benefits and grants

Local authorities and councils in the UK offer a range of different grants and financial assistance to landlords to help them improve the energy performance of their property, but the level of assistance differs from council to council. To check what grants landlords are entitled to from their local authority, they should call the Energy Efficiency Advice Centre, a service funded by both the Government and the Energy Saving Trust, on 0800 512 012.

Energy Supplier Grants

Energy companies offer subsidised rates on insulation and certain grants to their customers. Many of these grants are available to customers that rent a property as well as homeowners, so tenants could be entitled to discounts on measures such as cavity and loft insulation. The Energy Saving Trust, energysavingtrust.org, has the full range of grants and subsidies available to energy customers.