New Landlord green tax will put up rents

The government’s policy to improve the energy efficiency of the UK’s housing stock will almost certainly place upward pressure on rents in the private rented sector, warns the Residential Landlords Association (RLA)

The way a residential building is constructed, insulated, heated, ventilated and the type of fuel used, all contribute to its carbon emissions, and can now seriously impact on the cost of running the property and even its value.

It is estimated that buildings produce almost half of this country’s carbon emissions – almost double that of cars and planes – and so it is understandable that the government wants to address this issue.

But given that almost a third of private rented housing was constructed before 1919, making them some of the hardest to treat properties for energy efficiency improvements, the RLA is concerned that the new law coming into play from 2018 which will make it illegal to rent out property with the worst energy efficiency, will ultimately lead to higher rents for tenants, as private landlords pass on extra energy efficiency improvement costs onto renters.

The RLA has criticised the government for making no reference to the PRS in its consultation, closing this week, on the future of the Energy Company Obligation (ECO).

Despite ECO being designed to focus on fuel poverty, the consultation does envisage extending the scheme to the already heavily subsidised social sector, which has newer housing stock and fewer tenants in fuel poverty.

Previously the government supported landlords in implementing energy efficiency through the Green Deal and a tax allowance. These have now ended and the RLA has been told landlords could potentially face having to pay up to £5,000 up front for improvements.

RLA Policy Consultant, Richard Jones, said: “Whilst we all want to see improvements in the energy efficiency of homes to rent, that cannot come at the expense of driving up rents.

“The government’s proposals will amount simply to another tax on tenants.”

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Written by: Houseladder