Energy-efficiency funding must be linked to ratings, not tenant income
Proposals to link energy improvement funding to tenant income could be bad for the rental market, warns Propertymark's Henry Griffith.
Propertymark has called on Northern Ireland’s Department for Communities (DfC) to rethink the eligibility criteria for the Warm Healthy Homes Fund.
The agency trade body is warning that linking support for private rented properties to a tenant’s income risks leaving some of Northern Ireland’s least energy-efficient homes without financial support.
Responding to the DfC consultation on the £150 million Warm Healthy Homes Fund, Propertymark welcomed the ambition to reduce fuel poverty, improve thermal comfort and increase the energy efficiency of homes across Northern Ireland.
However, its main concern is that landlords’ access to funding for privately rented homes is based on whether their tenant meets the Fund’s income and benefits criteria, rather than the energy efficiency of the property itself.
Making access to funding for landlords dependent on the income of their tenant risks missing some of the properties that need investment most.”
Propertymark believes funding should be targeted at the homes most in need of improvement. Under the proposed model, an inefficient privately rented property could be excluded from support simply because its tenant does not meet the eligibility criteria.
Henry Griffith (pictured), Senior Policy Officer at Propertymark, says: “The success of the Warm Healthy Homes Fund should ultimately be measured by how many inefficient homes it helps to improve.
“Making access to funding for landlords dependent on the income of their tenant risks missing some of the properties that need investment most.
“The cost of improving a property sits with the landlord, so the energy efficiency of the property should be a key consideration when deciding where financial support is directed. If a property is particularly inefficient, that should be a stronger reason for support, not a reason for it to be excluded because of who happens to live there.”
Costs for landlords and tenants
Propertymark said it is particularly concerned about the implications for the private rented sector as Northern Ireland develops its proposals for Minimum Energy Efficiency Standards (MEES).
The average Energy Performance Certificate (EPC) rating for privately rented homes in Northern Ireland is currently 61, compared with 67 in England and 65 in Wales. If Northern Ireland introduces a requirement for privately rented homes to reach EPC Band C, landlords could face a significant cost to bring properties up to the required standard, Propertymark said.
With average property prices and rents lower than in many other parts of the UK, Propertymark warns that landlords may have to invest a comparatively high proportion of their property value and rental income in energy efficiency improvements. Without appropriate financial support, this could increase the risk of landlords selling or leaving properties empty, reducing the supply of homes available to renters.
Propertymark’s key recommendation is that an additional eligibility criterion should be introduced based on the energy efficiency rating of the property. This would allow funding to reach inefficient homes where the tenant does not meet the proposed income criteria.
