The government recently pulled the plug on financing the Green Deal so you may be wondering what this all means for you and your landlord clients.
The Green Deal suffered from many problems, and the erratic nature of its funding undermined the confidence of landlords and the industry at large.
Despite this, over £100 million worth of applications have been made since July 2013, so it’s clear the interest was there and it undoubtedly helped a number of landlords to make energy efficiency improvements.
In terms of current applications, the government’s decision won’t affect anyone who has a Green Deal loan or a Green Deal Home Improvement Fund voucher. Although the Green Deal Finance Company will not accept any further applications it does expect to process the ones it has already received.
What’s next for funding energy efficiency improvements?
The government remains committed to improving the energy efficiency of homes but decided that the Green Deal was simply not giving value to the taxpayer. DECC will – as part of a wider review of energy policies – now look at how funding can be provided in a more coherent way. Whatever happens, it’s an opportunity to build a means of supporting energy efficiency improvements that is more certain and sustainable than the Green Deal ever managed to be.
However, the minimum standards for energy efficiency are still due to come into play in 2018 so the government must move quickly. And this is where it could prove problematic for agents...
How will it affect agents?
While it doesn’t pose any immediate threats for agents it could cause issues further upstream in 2018, once the minimum standards are introduced. In just three years’ time it will be illegal to let F or G rated properties unless a relevant exemption has been granted, so the question for agents is: will you or your clients be able to keep on top of which properties meet the minimum standards?
Even if your landlord clients have an exemption, it could be problematic at the point of churn, as it won’t be immediately obvious which properties meet the standards. Of course, the legal requirement to have up-to-date EPCs should make it easier to pinpoint those properties that could be unlettable and potentially illegal. UKALA’s partner NLA Property Services has a large network of Domestic Energy Assessors (DEAs) throughout the country and can offer a quick and efficient EPC service as well as free energy assessments.
Agents have a level of duty to their clients to remind them of their obligations and to some extent prompt improvements where necessary. With the minimum standards just three years away, and the government’s review of energy efficiency policies yet to get underway, it wouldn’t be overly unrealistic to expect the Green Deal’s replacement to be implemented just in time to cause peak panic in the industry.
So it may be worth thinking about how you’ll approach this problem and how to communicate with your landlord clients sooner rather than later. For example, a simple audit of EPCs in the near future should give you enough intelligence to plan ahead and adequately manage expectations.
For more information on NLA Property Services visit: www.nlapropertyservices.org.uk.
*Richard Price is Executive Director of the UK Association of Letting Agents (UKALA)