Government handout of £10k per property for landlords

Government handout of £10k per property for landlords

16:13 PM, 31st May 2012, About 12 years ago 19

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As a landlord you can be forgiven for thinking that every bit of news from the government concerning the lettings sector is bad for the landlord – A new set of obligations which comes with the obligatory application process. Creating paper, jobs and VAT income for the government! Enough of my cynicism 🙂

So this article should bring you some cheer – and I will whisper this – A government policy that is based upon complete common sense!

It is the Green Deal and here’s how it works.

The government needs to reduce carbon emissions – it has something to do with saving the planet or such like. Anyway, as part of this, they’ve realised that our homes, particularly older ones, are not very energy efficient. They also realise that home owners and landlords will not spend their hard cash on energy saving measures because they take a long time to pay back by reduced fuel bills.

The Green Deal provides the following;

  • Up to £10k of grants to install or replace boilers, central heating, windows, wall and loft insulation
  • The grants are provided by private finance (eg B & Q etc). They get repaid by the energy companies who provide the house with gas/electric over 10+ years (so your tenant will pay for the works via their monthly gas/leccy bill 🙂 )
  • To qualify, the cost of the works must be equal to, or less than the energy bill savings (The Golden Rule) – So your tenants will not be paying higher bills In reality they will be paying less due to the increased efficiency.
  • There is no qualifying requirement for the house or tenant. Tenants can be private or DSS. You can even get the works done on your own home!

The Result;

  1. Happy landlord – No cost and a better house, attracting better tenants with higher rents and increased house value
  2. Happy Tenant – An improved house which is more energy efficient
  3. Happy government – No expenditure to pay and it creates lots of work for tradesman, creating tax receipts and boosting the economy
  4. Happy finance provider who will be making money on the loan for the grant works

A win, win, win…. win.

So – When do you start! It is planned to role out in October 2012.

How do you apply?

You need to have a report done by a Green Deal Assessor to confirm qualifying works and to make the grant application.

Our Property Managers are all Green Deal Assessors which means every one of our landlords properties will be assessed and automatically submitted for the improvements.

Best wishes,
Glenn Ackroyd

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16:57 PM, 31st May 2012, About 12 years ago

Things to consider:-
1 - How will loan be repaid when property is unoccupied?
2 - Will a loan of this sort loan impact sale ability of the property?
3 - How will the tenant save when loan is repaid by the difference between pre & post Green Deal bills. I.e. save £20 & that £20 pays loan it isn't knocked off bills?
4 - Wouldn't landlord be better utilising the exiting grants for Cavity Wall & loft insulation right now (free to £250 for CWI) than paying the increased charges on a loans post October?

18:48 PM, 31st May 2012, About 12 years ago

It is not a "grant" it is a finace arrangement with interest payable.  It may prove to be a way to get tenants to pay for upgrades, it may take much longer than 10 years to pay for itself?  What happens if the current tenant who gets the finance is a heavy energy user (say has 4 kids etc) moves out and the next occupier is a single person who works long hours and uses little energy, he may be paying nearly all interest/finance payments? i.e. you are only on "big savings" if you're a big user of energy!

19:26 PM, 31st May 2012, About 12 years ago

Does this apply in Scotland?

Paul Shears

19:29 PM, 31st May 2012, About 12 years ago

What does CWI stand for?

Steve Hards

23:33 PM, 31st May 2012, About 12 years ago

 CWI = cavity wall insulation

3:02 AM, 1st June 2012, About 12 years ago

If you can get improvements with existing programmes before Oct 2012 then do so if it gets you to the E standard.
Otherwise you will HAVE to use the Green Deal facility to rent a property in 2016 that presently doesn't meet the E standard.
So one way or the other you will HAVE to get the works done.
I reckon  there will be run on decent builders, so I would try and get the works scheduled ASAP.

9:35 AM, 1st June 2012, About 12 years ago

In a lot of the UK at present, you can get free (or very low
cost) loft and cavity wall insulation regardless of the tenant’s income.   The agent I use in Cambridge proactively wrote
to all their landlords about this and does not make an admin charge for doing the
paper work.

The energy saving trust has a helpline that will point you
in the direction of your local scheme.

Why ant all agents pushing their landlords to take advantage
of these schemes?   They are a lot better
deal than the “green deal” as there is no loan to be replayed by the tenants as
part of their electrical bill.

10:04 AM, 1st June 2012, About 12 years ago

Before anyone considers a Green Deal finance package they should read the Consumers Association Which? concerns about what some fear is more of a scam than a good deal. Even the Housing Minister Grant Shapps is considering suspending implementation until the potential rip off elements of the scheme are removed. Please avoid the hard sell and look at the concerns.

11:26 AM, 1st June 2012, About 12 years ago

yes, Scottish Executive have stated they intend it to apply there, but it will have their stamp on it.  Incidentally it does not apply in N. Ireland

11:35 AM, 1st June 2012, About 12 years ago

A1 - by whoever picks up the electric bill during the void, ie the landlord
A2 - remains to be seen.  There is some criticism that it could do, and that sellers may wish to pay off the green deal charge to ease the sale.A3 - There won't be much of a saving initially, but wait until prices double.  Then what might start off as a small (£50?) annual saving can become a few hundred pounds.  And with insulation, you generally get a more pleasant internal environment (less draughts, cold spots) so tenant sees a comfort benefit anyway, and landlord benefits from reduced likelihood of condensation damage.A4 - yes, some suppliers are offering free CWI/LI at the mo; could be worth considering; but green deal will cover improvements that are not currently offered by the suppliers, such as boiler replacement.

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