The growing awareness regarding climate change, as well as technological developments, are reported to have lifted the European market for energy efficiency to almost €25 billion. According to a report from Roland Berger Strategy Consultants, growth will accelerate in the coming years, with the market set to double by 2025 to a whopping €50 billion.
Green mortgages are also now being viewed as a viable alternative, with many pilots, schemes and products being introduced in the UK and throughout Europe. Integrating energy costs into affordability calculations does seem like a step in the right direction – if integrated properly. After all, as individuals, companies and business sectors, we should all be exploring ways to help the environment.
Within the housing market we are seeing modern methods of construction transform the building industry. Tech advances are also generating a wealth of low-carbon, sustainable and eco-friendly solutions, some of which are potential gamechangers within the housing and mortgage market.
In terms of landlords, April 2018 saw the introduction of a new law which meant they must meet new minimum energy efficiency requirements for all new tenancies, as well as any tenancy renewals. The aim being to cut tenants’ energy bills by up to £180 a year, lower the country’s greenhouse gas emissions and increase landlords’ property prices. However, if a recent headline in the money section of The Telegraph – ‘One in three landlords cannot afford to meet new energy laws’ – is anything to go by, then all too many landlords continue to suffer from this financial burden.
The rules will extend to existing tenancies in April 2020, and landlords will no longer be able to apply for exemption from this date. As highlighted in the article, the Residential Landlords Association (RLA) wants the Government to change the rules to make any EPC-related upgrade work tax-deductible to help landlords with additional cost implications.
This also includes a telling comment from David Smith of the RLA who said: “This leads to a ridiculous situation where, for example, a landlord who replaces a broken boiler can claim tax relief, but if they want to upgrade an energy inefficient one, they cannot.”
There is no question that energy efficient homes will benefit everyone in the long run. However, it’s important that the right kind of balance is struck in these government reforms, and landlords should not be held overly accountable in trying to achieve this environmental goal.
