Green Deal warning for buy-to-let landlords

One in ten buy-to-let homes will be unlettable in five years' time unless landlords take steps to improve their properties' energy efficiency, according to a recent report in The Telegraph.

New laws that take effect in 2018 will make it an offence to let out properties with the worst energy efficiency ratings. Such properties are much more common in the private rented sector than among owner-occupied homes or those rented out by councils or housing associations.

Tenants will also be able to demand improvements to insulation from 2016, when landlords will not be able to refuse tenants' "reasonable" requests for energy efficiency measures.

The legislation states that landlords must not let out properties with the two lowest energy efficiency ratings, F and G, after April 2018 at the latest. According to the English Housing Survey, published earlier this month, 11.4% of homes in the private rented sector were rated F or G in 2011. By contrast, only 2% of local authority homes and 1.6% of housing association properties had the lowest ratings. Among owner-occupied homes, the figure was 8.2%.

The poor energy efficiency scores of privately let homes reflect a relative lack of basic insulation. 57% of owner-occupied homes had cavity wall insulation where a cavity existed, whereas the figure for privately rented properties was 38%, the English Housing Survey found. Among social housing the figure was 63%.

The National Landlords' Association has launched a scheme to help investors to make energy efficiency improvements to their properties. It is based on the Government's new Green Deal, under which energy efficiency measures are paid for by a loan that is repaid via a supplement on the property's electricity bill. The idea is that the loan repayments are cancelled out by the reduction in energy bills, so there is no net cost to either landlord or tenant.