Green moves may make property owners see red
Home-owners and landlords will need to get to grips with ‘The Green Deal’ and new restrictions on property lettings if they want to avoid problems in the future.
The Green Deal
Under the government’s flagship initiative ‘The Green Deal’, properties will be assessed to establish how energy efficient they are and what improvements need to be made. You will not be expected to pay anything up front – but any works to improve your home’s energy efficiency will be financed through a loan linked to your energy bills. The idea is that once the loan has been repaid, you will enjoy the benefits.
There will need to be a balancing act between the extent of the recommendations and the potential savings over the duration of the loan which looks likely to be about 20 years. If the costs exceed the potential savings, then clearly the works will not be viable.
When it comes to selling or letting a property which is subject to ‘Green Deal finance’, potential buyers or tenants will need to be made aware of it, as the liability for the loan goes with the property. At the lower end of the market in particular, people are more likely to opt for properties where improvement works have already been carried out.
Restrictions on letting
For a long time, very little attention was given to the Energy Performance Certificates (EPCs) which all properties are required to have when put up for sale. However, new rules due to come into force in the next few years, will see extra importance given to EPCs to the extent that landlords will no longer be able to rent their properties without a minimum energy efficiency rating – probably E. Those properties with an F or G rating will have to undergo improvements before they can be let. We understand that local authorities will police the restrictions, with penalties of up to £5k being imposed if the regulations are breached.
There is little doubt of the impact both ‘The Green Deal’ and EPC letting restrictions will have on the property market in the future. My advice would be to re-assess your current property portfolio and develop a couple of contingency plans while waiting for the government to flesh out the regulations and finalise the details.
For further information or a conversation about your property issues or conveyancing needs, please contact Angus Williams in the Residential Property, Farms & Estates team on 01225 730100 or email firstname.lastname@example.org
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