Landlords exploiting eco-friendly BTL?

Published 23rd Jul 2007

The green agenda is fast becoming a top priority in the housing and construction industry…
The last couple of years have seen more than just calls for extra houses to be built in Britain. Encouraged by the government through competitions, grants and grand policy pronouncements, the grandest of all being the aim to make every new home carbon neutral by 2016, it seems that the priority is as much building green as building to solve the housing shortage.

Buy-to-let investors cannot be isolated from all this, of course. For one thing, many investors will themselves live in homes which may benefit from more insulation, the installation of solar panels to heat the water or other energy-efficient measures. Just as importantly, those renting properties from such investors may often be concerned with the same issues.

In May the Daily Telegraph highlighted the fact that buy-to-let investors, like anyone else who owns a property, will have to deal with the introduction of the government's home information packs. Just then, of course, the introduction was imminent, until the government realised that the industry, lacking sufficient inspectors, was not ready and had to put the launch date back to August.

Attracting ethically conscious tenants
For buy-to-let investors, the paper stated, the scheme will not be introduced until October 2008. However, it warned, investors would have to pay for the energy performance certificates which form a key environmental element of the packs. These have been controversial, partly due to the concerns about inspectors, but also due to the cost, which the Telegraph said would be around £200.

One expert told the paper there was one obvious difference between buy-to-let landlords and homeowners who live in the property that they would need a home information pack for before they could put it one the market. Quite simply, he put it, unlike the householder looking to move, "The landlord does not pay the heating bills in most homes he rents out". Thus there is no incentive for the person who does not personally save on fuel bills.

However, this may not necessarily be correct. The very fact of a property being rented out being more energy efficient, due to measures such as insulation, could be an attraction for some potential customers. Promises of lower fuel bills, as well as the attraction to ethically-conscious residents of a lower carbon footprint, could make such homes more attractive.

Paying extra for eco-friendly homes?
At the same time, some landlords may find they can still set a premium on the rent if they believe people will pay more for eco-friendly homes, just as many ethically-conscious consumers willingly pay extra for fairtrade goods.

Neil Marshall, chief executive of the National Insulation Association, has said that "Getting your home properly insulated is probably the greatest single thing anyone can do to reduce both their energy bills and their impact on the environment", adding that this is cost effective because the lower bills soon pay for the investment, he emphasised that the benefits should be clear enough to homeowners.

But the possibility of a premium on well insulated homes for let being viable could yet give landlords some benefit. Besides which, many eco-conscious investors may themselves be keen to ensure they are doing their bit for the environment. The price of a buy-to-let eco-home may not just be about money.

Source: ' Move Channel Ltd '

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