As this week is (I am told) the ‘Great Big Green Week‘ I thought a few posts on green issues were in order.
I discussed green clauses in tenancy agreements on Monday. Today I have a few random thoughts for and about landlords.
Landlords are important for reaching net Zero
A substantial proportion of our carbon emissions are from domestic dwellings and about 1/5 of these are in the private rented sector. So we really need landlords to take action to upgrade their properties.
However, landlords are getting more or less zero support for this. Bearing in mind that the cost of properly upgrading a property and making it carbon neutral is in many cases more than the landlord’s annual profit from that property – they are going to need some help. Many landlords get their main income from rental.
It is very much to be hoped that a more robust green funding scheme will be launched before COP26 – preferably one which is not closed down after a few months.
We also need:
- More training for young people to carry out the upgrade work as there is currently a skills shortage
- More funding for Local Authorities to support landlords (eg with grant aid) and training for their staff
- Support and encouragement for British companies manufacturing alternative heating appliances such as heat pumps
- More information generally on what is available. At the moment there is a lot of talk about what we all need to do but not much practical guidance on how we are supposed to actually do it.
Most decent landlords are as concerned about the climate crisis as the activists, but you can’t expect them to live on no income for a year to fund improvements. Many are already on the point of insolvency after the pandemic (when help for landlords and their tenants has been conspicuous for its absence).
Organisations such as the National Residential Landlords Association are lobbying the government – so landlords need to get behind them.
The problem of protected tenancies
I see this being a big problem. Most protected tenants (who have special tenancies regulated by the Rent Act 1977) are on low fixed incomes and would not be able to finance a bit increase in rent. This is why the (Labour) government introduced the Rent Acts (Maximum Fair Rent) Order in 1999.
This protects Rent Act tenants from regular increases of more than a specific amount (its approx 10% but there is a forumla).
The only time the order does not apply is per section 2.7 which says:
(7) This article does not apply in respect of a dwelling-house if because of a change in the condition of the dwelling-house or the common parts as a result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the landlord or a superior landlord, the rent that is determined in response to an application for registration of a new rent under Part IV exceeds by at least 15% the previous rent registered or confirmed.
This would presumably be the case where substantial green improvements are carried out. Protected tenants will (mostly) not be able to afford the increased rent and so will vigorously oppose access to carry out any green improvements.
I don’t know how many protected tenancies there are left (they are a diminishing category as no new protected tenancies have been created since January 1989) but I can see their landlords experiencing big problems if green upgrades become mandatory.
It may also be a problem with other tenancies with long term tenants on fixed incomes. But protected tenants are I suspect the main class of tenants who will be objecting to this.
The only way I can see this being overcome is for landlords to get full funding for upgrade works on the basis that they do not impose any rent increases.
Buyers should carry out flood risk checks before investing in new property
I say this now whenever I speak to landlords but it is a message for anyone who is buying property.
In Australia and California they have fires. In the UK the problem is predicted to be flooding. Lots of flooding. We are also facing a gradual rise in sea level.
So when buying a new property, it is really important that you check the flood risk. Its quite easy to do – there is a government long term flood risk page here. As you can see from the map – much of Lincolnshire should be avoided as should many coastal areas.
The problem about buying a property in a flood risk area is not just the risk of flooding – you will also find it very difficult if not impossible to obtain insurance for flood risk.
Rules and regulations need to be regularised
I wrote about this here. At the moment we have VAT on fossil fuels rather than energy savings measures – which actually discourages green improvements.
Plus EPCs recommend installing gas boilers – which are due to be phased out anyway over the next 10 years, rather than switching to green energy suppliers and installing things like solar panels and heat pumps.
For some inexplicable reason, the Treasury seems to be dragging its feet on the VAT issues (hopefully it is not because of fossil fuel company donations to party funds). I hope they do something before COP26 otherwise they are going to look stupid.
A few more random thoughts
- Improvement works could be channeled though local Landlord Associations who could liaise with suppliers and tradespersons to get economies of scale for their members
- Why not approach insurance companies to see if they will help fund improvements? At least for flood defence – it will after all help reduce claims
- What about grants for landlords to instal electric car charging points on all suitable properties? Or just instal them anyway on the basis that it will provide another income stream?
- Politicians need to stop bashing landlords (such as Labours suggestion that they be made to pay for social care). Landlords provide an important service and if treated right can help with the push to carbon neutrality. However they do not have bottomless pockets and this should be recognised.
If YOU have any thoughts – put them in the comment box below (you need to scroll down a bit).