What does the green home grant mean for landlords?

There’s still about two weeks left to apply for the Green Homes Grant. At present, there’s no sign of this being extended or repeated. This means that landlords should hurry to make the most of it while they can. To explain further Mark Burns, Director of Pure Investor, provides advice on what landlords need to know.

The basics of the Green Homes Grant scheme

The Green Homes Grant was introduced in July 2020. Its stated aim is to help 650,000 homes save an average of £300 annually on energy bills. By the terms of the scheme, the government will fund two-thirds of the cost of eligible improvements up to a maximum of £5000 per household. There is a total of £2 billion of funding available. This will be disbursed as vouchers.

In principle, landlords can claim for as many households as they wish. In practice, landlords should be aware that they are limited to a maximum of €200,000 in state aid over a three-year period.

Landlords cannot use the Green Homes Grant scheme if they have already received funding for the same improvements from either the Energy Company Obligation (ECO) or the Local Authority Delivery Scheme. You can use the Green Homes Grant in combination with the Domestic Renewable Heat Incentive (RHI).

Interestingly, when landlords apply for the Green Homes Grant, they need to show proof that the property already complies with the Domestic Minimum Energy Efficiency Standard Regulations (MEES). This means that grants cannot be used to bring the property up to this standard. It can, however, be used to bring it up to a higher standard.

Eligible improvements

According to the terms of the scheme, eligible improvements are divided into primary and secondary categories. You must undertake at least one primary improvement to get funding for any secondary improvement. The cost of the secondary improvements must be equal to or less than the cost of the primary improvements.

Primary improvements are improvements related to large-scale insulation and/or low-carbon heating. This means:

Insulation

• cavity wall insulation
• flat roof insulation
• insulating a park home
• loft insulation
• pitched roof insulation
• room in roof insulation
• solid wall insulation (internal or external)
• under-floor insulation (solid floor, suspended floor)

Low carbon heat

• air source heat pump
• biomass boiler
• ground source heat pump
• hybrid heat pump
• solar thermal (liquid-filled flat plate or evacuated tube collector)

If you are thinking of having solar panels installed, be sure to do your research very carefully. In particular, make sure you’re clear on how it would impact your rights to your roof. This could prove a huge issue if you come to sell the property.

Secondary improvements relate to windows and doors, heating controls and insulation. This means:

Windows and doors

• double or triple glazing (where replacing single glazing)
• draught-proofing
• energy-efficient replacement doors (replacing single glazed or solid doors installed before 2002)
• secondary glazing (in addition to single glazing)

Heating controls and insulation

• heating controls (such as appliance thermostats smart heating controls, zone controls
• hot water tank insulation
• hot water tank thermostat
• intelligent delayed start thermostat, thermostatic radiator valves)

Making the most of the Green Home Grant

At present, the Domestic Minimum Energy Efficiency Standard Regulations require a minimum energy efficiency rating of E. Given the general direction of travel, it’s probably a safe bet that this will be raised in future. In fact, it may be raised in the fairly near future. Now could therefore be the perfect time to “future-proof” properties.

Even if this does not happen, energy-efficient properties tend to be more appealing to tenants. This is likely to become even more true if people spend more time working from home and hence have more need for their heating. Many tenants are very concerned about sustainability and most are concerned about their energy bills.