Landlords need to prepare now to unlock Green Homes Grants
Thousands of homeowners and landlords could get grants worth up to £5,000 as part of a £2bn grant scheme to improve home insulation. This is one of the few measures announced by the Government in the last three months that assists landlords.
Private landlords welcomed Chancellor Rishi Sunak’s announcement that they will also be able to apply for vouchers to help fund the cost of energy improvements, as rental homes were not mentioned in the Commons statement. The move is part of a £3bn plan to cut carbon emissions.
Green Homes Grants will allow households in England to receive vouchers worth up to £5,000 to spend on measures such as loft and wall insulation, draft proofing, double-glazing and low-energy lighting to improve the Energy Performance Rating (EPC) of a property. The government will provide at least £2 for every £1 home-owners and landlords spend to make their homes more energy efficient.
As well as helping to meet the UK’s 2050 target of achieving net-zero carbon emissions, the move could help support more than 100,000 jobs in the wake of the Covid-19 lockdown. The Treasury claims the scheme could save up to £600 per year on energy bills.
Landlords are urged to assess the energy efficiency works that their properties require in advance of the opening of online applications in September.
Research from tax and advisory firm, Blick Rothenberg, shows that there are around 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.
Heather Powell, property partner at Blick Rothenberg: “It is likely that the Government will tighten energy efficiency regulations still further in 2021, making these works essential for many rental properties.
“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.
“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 landlords.”
The full details of the Green Homes Grants have not been published, but given the funding announced is 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 they can apply for the funding.