Energy Advice for Landlords

 

We are working with landlords to raise awareness of insulation and heating grants to help improve the energy efficiency of private rented accommodation.

 

By installing insulation and heating measures landlords will be helping to combat fuel poverty and reduce carbon dioxide emissions.

 

Landlords won't benefit directly from the lower fuel bills they will benefit in other ways:

 

The easiest measures to install are loft and cavity wall insulation.  Loft insulation is laid in sheets between the joists in the loft space and provides a barrier to stop heat escaping through the roof. For cavity wall insulation small holes are drilled into the walls of a property and insulation is pumped in to fill the cavity forming a barrier to stop the heat escaping through the walls. If the property doesn't have cavity walls then there are still solutions such as external insulation or dry lining.

 

Always check that any cavity wall contractors are registered with the Cavity Insulation Guarantee Agency (CIGA) as they guarantee any work done by registered contractors for 25 years.

 

 

The EU Performance of Buildings Directive is now in force.  It aims to improve the energy performance of buildings by requiring energy performance to be advertised on the sale or rental of a dwelling through Energy Performance Certificates (EPC).  Each building will be issued with a certificate that will have to be made available when it is constructed, rented out or sold; they are not necessary when a tenant rents a room and shares facilities.

 

Each certificate is valid for ten years.  The certificate will make recommendations showing how you could improve the rating and make the property more attractive to tenants. This is expected to become a greater deciding factor with the ongoing increases in fuel prices. 

 

The certificate will give each building a Standard Assessment Procedure (SAP) rating out of 100, and this will equate to an energy rating from A (highly efficient) to G (least efficient), similar to those seen on white goods. Ratings are influenced by type of property, its age, layout, construction, heating, lighting and insulation.  It enables prospective tenants to assess the estimated costs of heating the property.  The cost of producing the certificate is approximately £150 and will be the property owner's responsibility. If you carry out energy efficiency measures you can have the property re-assessed and a new certificate produced.  

You may be eligible for financial assistance towards installing energy saving measures. 

 

Energy companies are currently being required by the government to fund energy improvements in domestic homes. They are obliged under the Carbon Emissions Reduction Target to provide grants for homeowners to install cavity wall and loft insulation.  Landlords can claim these grants too for all or any of their properties. To receive a scheme sheet and energy pack please contact us (details below). 

 

Warm Front is a government scheme set up to help reduce fuel poverty by providing grants to people on eligible benefits to install heating and insulation measures.  The grants are available to home owners and private tenants.  If one of your tenants is on an income or disability related benefit they may be eligible and can apply direct to Warm Front on 0800 316 6011.  Warm Front will then contact the Landlord for permission to undertake the work at no cost to the landlord or the tenant.  It should be noted that in some cases there may be a surplus to pay if installing a new heating system, it is best to agree with the tenant before going ahead who is responsible for paying this.  The works can include loft and cavity wall insulation, draught proofing, hot water tank insulation and gas, electric (up to £3,500) or oil central heating (up to £6,000).  If the property needs gas to be connected Warm Front may be able to carry this out.  The work will be covered by a free service agreement for 2 years, unless the tenant moves out, at which point the cover will end.

The Government has introduced some tax incentives to encourage private landlords to install energy efficiency measures in their properties -

 

This allowance can be claimed by all private landlords that pay income tax, either individual landlords or corporate landlords if your rental business is registered as a business and you pay corporation tax on profits from letting.  The LESA means that landlords can claim a deduction for income tax purposes (up to a maximum of £1,500) against their rental profit when they install cavity wall, solid wall, loft or floor insulation and draught proofing or insulation for hot water systems in any property they let.  This is in addition to the deduction that the Inland Revenue allows for wear and tear of furniture and fittings.  You can claim the allowance when filling in your tax return.

 

You can claim the allowance for each house, flat or bed sit you rent out.

 

For more information visit the Inland Revenue to find out more details.

 

This allowance can be claimed by landlords that pay corporation tax, larger landlords and businesses.  In practice this provides the landlord with the opportunity to claim 100 per cent of the tax back on any energy saving technology that they buy.

 

For a list of energy technologies that are eligible for this tax, see the Enhanced Capital Allowance Site

 

The ECA provides up front tax relief, allowing businesses to claim 100 per cent first year capital allowances against their taxable profits. This can deliver a cash flow boost and shorten the payback period on investments.  

 

The Health and Safety Executive and National Landlord Association has launched a one stop shop website to help landlords understand what they should be doing in regards to gas safety to keep tenants safe in any properties they let.  Visit the HSE website for more details.