The applications for the grant will open in just over a months’ time so Buy to Let landlords need to assess their properties now and get their applications in as fast as possible because thousands of people will apply. It is also likely that the Government will tighten energy efficiency regulations still further in 2021, making these works essential for many rental properties.
The grant scheme will fund £2 of every £3 spent by a landlord, up to a maximum of £5,000, to improve the energy efficiency of their properties. Works can include wall and loft insulation, draught proofing and double glazing – all works that should improve the Energy Performance Rating (EPC) of a property.
Landlords cannot let properties with an energy performance rating of F or G (unless they qualify for an exemption). Landlords should be planning to undertake works that can be done with the grant funding that is being made available. Their tenants will also benefit as they will get a reduction in their annual fuel bills.
The 27million homes in the UK, which generate up to 25% of the greenhouse gas emissions and energy demand in the UK, are some of the least heat efficient homes in Europe. The Government hopes the grants will improve these statistics and help the UK to meet the commitment to have net zero greenhouse gas emissions by 2050. Online applications by landlords will be passed to “registered local tradesmen” to do the necessary works – which the Chancellor expects to help generate a further 100,000 jobs in the Green Sector.
There are approximately 2.2m landlords in England, with an average of 1.8 properties each – a total of 3.96m buy-to-let properties. If landlords applied for grants to improve the energy efficiency of just 25% of their properties, and got an average grant of £3,300 for insulation, the Green Homes Grant funding would be £3.27bn, and 990,000 homes would have been improved.
The Chancellor announced £2bn to fund grants in 2020/21, and stated he hopes 600,000 homes to be improved, but he made it clear that his funding was based on estimates of take-up of the funding, and indicated it is not capped, which is good news for buy-to-let landlords.
The full details of the Green Homes Grants have not been published, but given the Grant funding announced was only for one year it is important that Landlords start reviewing their housing, assessing what work should be done that is eligible for the grant, so that that they can apply for the funding. This is one of the few measures announced by the Government in the last three months that assists landlords. Landlords should therefore make sure that they take advantage of the funding, and at the same time help the UK achieve net zero greenhouse gas emissions by 2050.