A new government initiative has been launched to help landlords in England improve the energy efficiency of their rental properties. However, landlords who receive this funding will be restricted from increasing rents while the improvement works are being carried out.
The scheme, called the Warm Homes: Local Grant, is set to open this week. It provides financial support for landlords whose properties have an Energy Performance Certificate (EPC) rating of D or E. Under this programme, landlords can claim up to £30,000 for upgrades on their first rental property, while additional rental homes can receive up to £15,000 each.
This funding aims to encourage landlords to make energy-saving improvements without passing the costs onto tenants through rent hikes. By ensuring properties meet higher energy standards, the scheme is expected to benefit both landlords and tenants in the long run.
However, the grants come with certain eligibility criteria. They are only available to tenants who are classified as low-income, and the properties in question must be located within specific postcodes. This means that not all landlords or tenants will be able to benefit from the scheme.
With increasing pressure to improve the energy efficiency of rental homes, the Warm Homes: Local Grant provides a financial incentive while also ensuring that vulnerable tenants are protected from immediate rent increases.
Landlords need to meet criteria
Landlords with properties rated EPC F or G will need to provide proof of an exemption to qualify for the grant. Without this documentation, they will not be eligible for funding under the scheme.
The government has stated that the focus of the initiative is to improve the energy efficiency and heating systems of low-income households, ensuring support reaches those who need it most. The aim is to help tenants in vulnerable financial situations while encouraging landlords to upgrade their properties.
To apply for the grant, landlords must meet three key criteria. First, the property must be located in an eligible postcode, determined by deprivation factors. Second, tenants must be receiving certain benefits, such as Universal Credit or housing benefit, or meet the ECO4 Flex Criteria. Lastly, the household’s gross annual income must be below £36,000.
Local councils will be responsible for verifying that applicants meet all the necessary requirements before any funding is awarded. This ensures that the grants are distributed fairly and to those in genuine need of assistance.
While there is no limit on the number of properties a landlord can apply for, the total maximum grant payout is capped at £315,000. This includes any previous government funding received for property upgrades under similar schemes.
Not result in an increase to rental prices paid by tenants
A document from the Department for Energy Security and Net Zero states that landlords will not be permitted to raise rents while energy-efficiency improvements are being carried out under the Warm Homes: Local Grant scheme.
According to the document, landlords who receive funding for energy upgrades or low-carbon heating improvements are expected to maintain current rental prices for their tenants. Any increase in rent as a result of these upgrades would go against the scheme’s conditions.
To ensure compliance, authorities will actively monitor participating landlords. If evidence of rent increases is found, the government reserves the right to amend or withdraw support for landlords and the private rented sector (PRS). This means that landlords who do not adhere to the scheme’s expectations could risk losing access to funding.
Additionally, the government has stated that policy changes may be made to PRS support if there are shifts in the broader policy landscape. This suggests that further restrictions or adjustments could be introduced depending on future developments.
All landlords who apply for the grant will be registered in a central database. This database will track those participating in the scheme, likely as part of the government’s ongoing efforts to oversee and regulate energy efficiency improvements in the private rental sector.
Huge swathes of landlords will be left in the cold
The National Residential Landlords Association (NRLA) has expressed support for the funding scheme but believes it does not go far enough. They argue that many landlords who do not meet the eligibility criteria are being unfairly excluded.
Meera Chindooroy, the NRLA’s deputy director for campaigns, highlighted concerns about the scheme’s limited scope. She pointed out that large numbers of landlords across the country will be left without financial support, despite facing similar challenges in improving energy efficiency.
Another major concern is whether the funding will be sufficient to cover the required improvements in the areas already chosen to receive support. With high demand and limited resources, some landlords may struggle to access the grants.
Chindooroy also emphasised that the private rented sector (PRS) includes some of the oldest and most difficult properties to upgrade in the UK. Without wider financial support, many landlords will find it challenging to meet the required energy standards.
The NRLA is calling for a more comprehensive package of financial assistance that is accessible to all landlords, ensuring that improvements can be made across the entire sector, not just in select areas.
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