Government internal spat over landlord EPC cost cap revealed
Energy secretary's £13bn green schemes stall over disputes with Treasury, including how much cap should be on landlords’ rental upgrades.
Ed Miliband’s plans to deliver greener homes have been thrown into disarray as HM Treasury and Department for Energy Security and Net Zero have aruged over multiple policy issues including how much landlords should be forced to pay for upgrades to rental properties, it has been revealed.
As part of those plans, the energy secretary had intended to launch his £13 billion warm homes plan in October after winning funding during the spending review. However, Martin McCluskey, the Minister for Energy Consumers, told parliament this week the plan would now be “rolling out before the end of the year”.
But several sources told The Times the Treasury and energy department were at loggerheads on policy options, although a Government source strongly denies this. The cost of upgrading to the looming minimum EPC band C, which is now just three years away, has been cited as a key reason why many landlords have, or are considering selling up.
Landlord spending cap
This includes an argument over the spending cap for landlords under separate rules that will force the private rented sector to achieve EPC C ratings by 2028 for new tenancies and 2030 for all tenancies. The cap was originally set at £15,000 per property.
The cap is the maximum landlords must spend on energy efficiency improvements before they can apply for an exemption if their property still fails to meet the EPC C standard. The figure has already been increased from a previous proposal of £10,000 and from the current cap of £3,500.
Government estimates suggest the average cost of upgrading properties to EPC C is around £7,700, but around 10% of properties cost more than £15,000 to upgrade. A consultation that closed in May asked for feedback on whether the £15,000 cap is appropriate, with some proposals suggesting a lower £10,000 “affordability exemption” for certain properties.
Billions of pounds of investment and spending are on hold while we await the plan.”
Ned Hammond, Deputy Director of Policy at industry body Energy UK, said: “Billions of pounds of investment and spending are on hold while we await the plan.”
Not sure where the government obtain their cost figures to achieve band C but the EPC costs coming back to us on new EPCs to achieve Band C on stone rural properties are more in the region of £25k plus. The other issue they do not seem to be aware of is that to achieve this the tenant will need to move out as to achieve Band C many require floor and wall insulation, under floor heating and complete energy change.
I would expect around 35% of the properties in the rural stone category currently with oil or tanked LPG heating will be sold off. This is a crisis in rural areas as often wages do not allow the residents to buy so they will often have to move from the villages their families have been in for generations.
Sadly most of these properties the EPC is just plain flawed as the thick walls already provide insulation.