Page last updated at 15:29 GMT, Thursday, November 4 2010

Energy Efficiency in Private Rented Properties

Eastleigh Borough Council is currently working with local landlord forums to encourage landlords to install energy efficiency measures within their properties by raising awareness of the grants and funding available to them.  Privately rented properties make up about 5% of the housing stock in the Eastleigh area and by targeting these properties Eastleigh Council is not only trying to combat fuel poverty but also help reduce carbon dioxide emissions and the regions contribution to climate change. 

Landlords Must Provide an Energy Performance Certificate to all New and Prospective Tenants

For more information on many aspects of energy efficiency for landlords, download the Department of Communities and Local Government (DCLG) Guidance for Landlords.  There is also DCLG Guidance for Tenants.  

To find a qualified Domestic Energy Assessor (DEA), visit the EPC Register .

Energy Efficiency measures

The most common, and effective, measures to install are loft and cavity wall insulation.  In the loft, sheets are placed between and over joists, and for cavity walls, small holes are drilled into the walls of the property and the rock wool is pumped in to fill the cavity.  For properties without cavities there are a number of different internal and external insulation solutions. 

All new and replacement boilers are now required to be efficient condensing boilers. 
There have been problems in the past where incompetent or unscrupulous contractors have installed cavity wall insulation carelessly.  However, if done correctly the work will improve the property, serve to avoid damp by keeping the inside of the house warmer.  The Cavity Insulation Guaranty Agency has published a CAVITY WALL INSULATION Good Practice Guide to help you ensure your walls are suitable for cavity wall insulation and that the job is done correctly.  You should also ensure that the contractors are registered with the Cavity Insulation Guarantee Association (CIGA) - who guarantee work done by those registered for 25 years.  CIGA's Frequently Asked Questions can give you some quick brief answers

Energy Performance Certificate - Required for all Rented Properties from 1st October 2008

The EU Performance of Buildings Directive is now in force.   Its aim is to improve the energy performance of buildings by requiring energy performance to be advertised on the sale or rental of a dwelling.  This will be achieved by the introduction of the Energy Performance Certificate (EPC).  Each building will be issued with a certificate that will have to be made available when it is constructed, rented out or sold.  The certificate will make suggestions of cost effective actions to improve the energy performance of a property, but more importantly will allow prospective tenants to compare buildings on energy performance.  This is expected to become a greater deciding factor with the ongoing increases in fuel prices.

The certificate will give each building a SAP (Standard Assessment Procedure - out of 100 possible) rating, and this will equate to an energy rating from A to G, similar to those seen on white goods.   See below for details of how to find an assessor in your area. 

The cost of producing the certificate is estimated at £150 and will be the property owner's responsibility.  Each certificate will last for ten years unless major renovation work is carried out on the property.  Property owners can voluntarily get a new certificate after installation of energy efficiency measures - particularly if these improve the energy rating.

Carbon Emissions Reduction Target (CERT) legislation

Energy companies are currently being required by the government to fund energy improvements in domestic homes.  They are obliged under the Carbon Emissions Reduction Targets to provide grants for homeowners to install cavity wall and loft insulation.  Landlords can claim these grants too for all or any of their properties.  

These grants are constantly changing so for up to date advice on the latest offers call Your Energy Efficiency Advice Centre on 0800 512 012.

Fuel Poverty Grants - Warm Front

Warm Front is a government scheme set up to tackle the issue of fuel poverty by providing financial assistance for people on certain benefits to install insulation and heating systems.  The grants are available to tenants of private sector housing as well as those who own their own home.  If one of your tenants is on any of a range of benefits, they can apply direct to Front for assistance (telephone 0800 316 2814).  

Warm Front will then contact the Landlord for authority to undertake the work  at no cost to the landlord or the tenant.  With the installation of a new heating system, and/or loft and cavity wall insulation there is sometimes a surplus to pay - it is best to agree with the tenant whether landlord or tenant will be responsible for this surcharge prior to the work being carried out.  These works can include full gas central heating (up to £2700), oil central heating (up to £4000), the installation of storage heaters if the property is not on the gas network.  If the property needs gas to be connected Warm Front will carry that out as well.  The work will be covered by a free service agreement for 2 years, unless the tenant moves out, at which point the cover will end.

Alongside these grants the Government has also introduced some tax incentives to encourage private landlords to install energy efficiency measures in their properties:-  these are the Landlords' Energy Saving Allowance (LESA, aimed at small landlords) and the Enhances Capital Allowance (ECA, aimed at businesses and large private landlords).

Landlords' Energy Saving Allowance (LESA)

This allowance can be claimed by all private landlords that pay income tax, usually individual and smaller landlords.  The LESA means that landlords can claim a deduction for income tax purposes (up to a maximum of £1,500) against their rental profit when they install cavity wall, solid wall or loft insulation, draught proofing or insulation for hot water systems in any property they let.  This is in addition to the deduction that the Inland Revenue allows for wear and tear of furniture, fixtures and fittings (currently 10%).

Enhanced Capital Allowance(ECA)

This allowance can be claimed by landlords that pay corporation tax, larger landlords and businesses.  In practice this provides the landlord with the opportunity to claim 100% of the tax back on any energy saving technology that they buy e.g. if a boiler were bought at £100 and assuming a tax rate of 30% then £30 could be claimed back in the first year.

For a list of energy technologies that are eligible for this tax, see the: Enhanced Capital Allowance Site

The ECA scheme was set up to encourage UK businesses to reduce carbon emissions which contribute to climate change.  The ECA provides upfront tax relief, allowing businesses to claim 100% first year capital allowances against their taxable profits.  This can deliver a cash flow boost and shorten the payback period on investments.