Private renters and landlords should benefit greatly from the latest Government plans to encourage householders to make their homes warmer and cheaper, according to the National Landlords Association (NLA).
The Pay as You Save scheme proposal announced this week will provide cash in the form of loans to residential property owners to help make their home more environmentally-friendly. Repayments can be made over an extended period of time. The government says that the savings made through more efficient energy use will make it easier to pay off the loans.
The loans will be tied to the property rather than to the homeowner. The thinking behind this is that it means properties can be sold even if a loan is not yet paid off.
The idea behind the plan is to reduce the upfront costs property owners can face when trying to make their homes greener and more energy efficient. The government wants to see a 29 percent reduction a carbon emissions from residential properties during the next 10 years.
Chris Norris, Policy Manager at the NLA, said: “It is reassuring that these proposals will be available across all types of tenure. However, privately rented property tends to be older and harder to make more energy efficient. It is hoped these measures will remove some of the barriers to making all accommodation less damaging to the environment.”
RICS spokesperson, Barry Hall said: “RICS actively supports the drive to improve the energy efficiency of the UK housing stock, and actions to encourage the take up of measures to achieve this.
“However, it is imperative that information provided to consumers on the true costs of installation, expected lifetime, anticipated maintenance costs and savings achieved, together with the impact on property value, are clear, impartial and objective.
“For consumers to buy into such measures, they must have confidence in the advice, the products, their installation, and the supporting financial information provided.”
However, although the Federation of Master Builders (FMB) believes the Government’s green strategy is a welcome boost the organisation believes there is a far easier solution.
Brian Berry, Director of External Affairs at the FMB said: “A simpler way of encouraging householders to make their homes greener and more energy efficient would be to cut the rate of VAT to 5 percent for home improvements.
“Many householders under the Government’s proposed ‘pay as you save’ will be worried about attaching a new debt to their property and the impact this could have on the resale value of their home.
“We know that the cost of cutting VAT to 5 percent for repair and maintenance work would cost the Treasury between £102 and £508 million but the total stimulus to the British economy as whole would be in the region of £1.4 billion.
Added to this is the fact that a cut in the rate of VAT would create an extra 55,000 new jobs which is not an insignificant number when unemployment is on the rise.”
