How landlords and homeowners can get £5,000 to improve properties
From September, property owners will be able to apply for a grant to make energy efficiency improvements to their homes. Landlords can use this to make their buy-to-lets more appealing. In last week's big housing announcement, Chancellor Rishi Sunak unveiled a new £2bn home improvement grant for homeowners. The initiative will start in September, allowing all property owners - including landlords - to take advantage. Grants will cover "at least two thirds of the cost" of any improvement work, up to a value of £5,000 per household.
All renovations must increase the energy efficiency of the property, as well as fulfilling certain other criteria. Tenants themselves cannot apply, but property investors and landlords can use the vouchers to improve their rental properties. The government also believes the scheme could help create more than 100,000 jobs. Typical examples of qualifying improvements include insulation, heating, double glazing and draught-proofing. Renewable energy features such as solar panels and heat pumps can also be claimed through the scheme.
Energy efficiency issues in the PRS In the private rented sector, it is currently illegal to let out a property with an EPC rating of F or G (the lowest rating). This could be raised to a minimum legal rating of D or higher in the future. Most new-build homes have the top ratings of A or B. For those living in a house with the highest rating, annual energy bills are significantly cheaper, while running the property is also much more environmentally friendly. The latest grant announcement will therefore be welcome news to the sector, to continue improving standards in the PRS.
David Cox, chief executive, ARLA Propertymark, commented: “Since the withdrawal of LESA [Landlords Energy Saving Allowance], we’ve been calling for a simple grant scheme to help private homeowners and landlords make their properties more energy efficient." “The announcement is a big step forward to ensure that they can take the necessary steps to do this and ultimately create a greener property sector in the UK.” The benefits of 'green' rental property for landlords As the country's housing market trends have shifted over recent years, the rental market has become more important.
Typical tenants are now older, tend to be professionals and stay in their rental homes for longer. It has become more of a lifestyle choice, partly influenced by finances, with buying a home becoming less of a priority. Equally, standards in the private rented sector continue to improve. Increased legislation and stricter regulation mean tenants are more protected than ever. As such, many renters expect much more from their rental homes. Landlords who invest more in their properties and offer a space that caters for their target tenant are now seeing the most success.
Environmental issues are extremely topical, so landlords offering 'greener' properties attract more tenants. Aside from this, tenants are drawn to properties where bills are lower and less upkeep is required. The recent coronavirus pandemic has also meant the amount of time we spend in our homes has increased. In many cases, this has pushed household bills up. Landlords who invest in energy efficiency improvements now can use this as a selling point for tenants who are likely to spend time working from home.
BuyAssociation has a wide selection of property investment opportunities across the UK. Most of our properties are new-builds or newly converted properties with the highest energy efficiency ratings, for landlords and homeowners. Get in touch for more information, or sign up for free for early access. Source: How landlords and homeowners can get £5,000 to improve properties