The Green Deal Mandy Bygrave NLA representative National Landlords Association

Overview What is the Green Deal? How will it work? What is the catch? Why is the Green Deal important to landlords?

What is the Green Deal? One of the keynote parts of the Coalition Agreement  Improve the energy efficiency of the UK Housing Stock  To meet EU target of 20% CO 2 reduction by 2020 The Green Deal will overcome the ‘Split Incentive’:  The landlord pays for the improvements  The tenant benefits from reduced fuel bills The Green Deal will require NO up-front cost to landlords for the improvements The Green Deal was launched on 28 January 2013

How will the Green Deal work? Landlord approaches a Green Deal Provider who will:  Assess the property  Decide on the necessary improvements (with landlord)  Organise for improvements to be completed  Pays for the energy efficiency upgrades The improvement costs are then repaid by whoever pays the utility bills GOLDEN RULE: The cost of the new utility bills + the loan repayment must be lower than if nothing had been undertaken

Original Fuel Bill Repayment Saving Green Deal Improvement Before New Fuel Bill After Golden Rule Explained

Energy Efficiency Measures 45 different measures included under the Green Deal Measures definitely included in the Green Deal:  Loft insulation  Cavity wall insulation  Floor insulation  Draught proofing  Water-pipe lagging  Thermostatic Radiator Valves (TRVs) Measures likely to break the Golden Rule:  Solid wall insulation  New Boilers  Double Glazing  Microgeneration

Energy Company Obligation (ECO) Subsidy commitment placed on the 6 largest energy companies  Valued at approximately £1.3bn per year  Will create three subsidy streams Carbon Saving Obligation (£760m)  High cost measures that will break the Golden Rule  A need for Solid Wall Insulation will trigger funding Affordable Warmth Obligation (£350m)  Designed to tackle fuel poverty  Occupiers on certain benefits will be eligible Carbon Saving Communities Obligation (£190m)  Targeted support towards low-income communities  Geographically based on Index of Multiple Deprivation

Original Fuel Bill Repayment ECO Subsidy Green Deal Improvement Before New Fuel Bill After ECO Carbon Saving Obligation Explained

What is the catch? None. The Green Deal is available for landlords  You are encouraged to use it for all your properties From 2016  Tenants will be able to demand Green Deal improvements  Landlords will not be able to unreasonably refuse From 2018  Ban on letting any property with an EPC rating of ‘F’ or ‘G’

Why is this important to landlords? Limited work required by the landlord  FREE to landlords  Very little paperwork involved It will probably reduce voids  Warm Tenant = Happy Tenant = Stays in properties longer Maintains the fabric of your property  Reduce problems with damp, mould and condensation  Stops pipes freezing in the winter Note: New-look EPC states Green Deal savings

New Look EPC

Why is this important to landlords (cont.)? Most landlords say they can self-regulate  No more legislation governing the PRS is necessary The Green Deal is the Government’s way of allowing landlords to prove this  DECC want the Green Deal to be predominantly voluntary  The Green Deal is NO COST and LIMITED PAPERWORK for landlords KEY - If landlords do not take up the Green Deal they have failed to demonstrate they can self-regulate  More regulation of landlords is bound to follow

NLA Green Deal NLA Green Deal Assessment  £99 Non-Members, £56 Members  KEY: Refunded to landlord if they go forward  NOT taken-off Green Deal Charge Bespoke On-line System  Track the progress of your Green Deal and ECO  Keeps all consents and documents in one place  KEY: Will not allow landlords to fall foul of regulations Guaranteed ECO Funding  We have sourced our own pot of ECO money  KEY: If the property is ECO-eligible it will get done  No worries about ECO companies saying it’s not cost-effective Best Available Interest Rate  Not tied to a single Green Deal Provider  NLA will regularly go to market to source best Interest Rate

Albert Embankment LondonSE1 7TJ Tel: Web: Green Deal Information: National Landlords Association