With demand growing for the government to provide more help for landlords to meet increasingly strict energy efficiency targets, the news that landlords will be entitled to apply for the £5,000 boiler replacement grants will be seen as a good start, but only a start.
Since April of 2020, privately rented homes have been required to meet minimum energy efficiency ratings of EPC band E, but while landlords will no doubt be pleased for the opportunity to claim grants toward replacing existing gas boilers with more energy efficient heat pumps, the news comes in the same week that 59 local authorities were granted £4.3 Mn of extra funding from the Department for Business Energy and Industrial Strategy to increase compliance.
Commenting on the grant scheme, Ben Beadle, Chief Executive of the NRLA stated:
80% of private rented households have gas central heating and replacing such systems will be both costly and vital to achieving net zero.
Providing grants to assist householders and landlords to install heat pumps is a welcome step, but much more is needed to make the Government’s targets achievable.
Once again private landlords have been left waiting for the Government to publish details of the standards they will be required to comply with, the deadlines they must meet, and how such work should be funded.
This is not only provoking dispute between the private rental sector and the government, however, as renters are often caught between landlords unable or unwilling to make costly improvements and skyrocketing utility bills.
With the present status quo seemingly unacceptable to both sides of the landlord-tenant relationship, Dan Wilson Craw, Deputy Director of Generation Rent, had this to say of the Government’s latest strategy:
Private rented homes are the hardest to make greener because the tenant pays the bills but has to rely on their landlord paying for the improvements.
Raising gas prices might encourage homeowners to invest in heat pumps, but on its own that won’t get landlords putting basic insulation in their properties, let alone installing the newest technologies. As a result, more renters will be unable to afford to heat their homes properly. Homes that are harder to heat are more likely to have damp problems, causing health problems for their occupants.
The net zero agenda should deliver lower bills and healthier homes for renters, but without a better plan the Government will achieve the opposite.
Although all sides seem to have fingers pointing at every other side of the argument, there seems to be a reasonable disaffection with current efforts to drive efficiency improvements in the private rental sector. What remains to be seen is whether representatives of both landlords and tenants can come together to demand an improved package of assistance from the government to drive the changes it is demanding.
What this means for Wirral landlords
As things stand, the opening up of grants to landlords means that there will be a potential grant that will cover between a third to a half of the cost of installing a heat pump in a residential property. However, for landlords specifically in the Birkenhead area, it may be worthwhile checking on the Wirral council’s ambitious Birkenhead Heat Network plans to see whether their property falls within the boundaries of a proposed community heating project.
While there is no doubt that the current package is insufficient, with some assessments finding it could cover up to 30,000 of the required 600,000 per year to meet targets and Shadow Business Secretary Ed Miliband calling it “meagre, unambitious and wholly inadequate”, there is a concerted effort being made by low carbon energy suppliers such as Octopus Energy to reduce the cost of heat pumps to more manageable levels.
While it may involve weighing up the potential costs and savings of playing a waiting game, there does seem to be an unfortunate benefit to seeing what may emerge as the April opening of grant applications approaches.
With EPC requirements set to get stricter over the next couple of years, something will need to change but, as things stand, central government seems to be hoping that landlords will foot the majority of the bill for hitting their targets.
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