Farming Talk: Green Deal to improve home energy ratings

The Government's commitment to sustainability has now thoroughly permeated the UK property sector. First we had the Localism Bill and National Policy Framework for planning. Now we have the Energy Act 2011 which has far-reaching implications for UK property.

This new legislation has three main threads. First, the Green Deal which creates a new framework for financing energy efficient home improvements. Next there are changes to the private rented sector which will require improvements to low energy efficient let houses and other buildings.

Finally there is the energy company obligation that will require power companies to improve efficiency and energy security and reduce carbon emissions.

The Green Deal will be implemented later this year. It will cover various energy improvement measures such as loft insulation, cavity wall insulation, high efficiency boilers and double-glazing. The plan is that rather than pay up front, a householder can pay for these improvements over an extended period – perhaps up to 25 years.

To qualify, the improvement measure must be eligible, suitable for the property and show real savings over the pay-back period. This is known as the 'golden rule'.

Although the take-up for an energy improvement measure, such as cavity wall insulation, will be with an individual, the obligation for future repayments will be attached to the house.

What this means is that a new owner or tenant could find themselves responsible for repayments initiated some years before by an earlier owner or occupier. The repayments are likely to be collected through electricity and gas bills, so if you buy or rent a house subject to these agreements, you could find you have a higher than expected utility bill.

Meanwhile landlords and tenants of let houses will have to grapple with changes to energy efficiency standards. From April 2016 tenants of private rented houses will be able to request landlords' approval for energy efficient improvements under the Green Deal.

By April 2018 it will be unlawful to rent out either residential or business premises that do not reach a minimum energy efficiency standard.

This is currently expected to be the EPC rating 'E'. This means that landlords could find themselves having to undertake expensive upgrading, especially to older rural property. There is currently no exception for non-traditional construction or listed buildings. These often make up the bulk of the lowest energy efficient properties EPC-rated 'F' and 'G' and many are located in the countryside.

This could lead to some pretty ugly, albeit energy efficient, buildings in the countryside.

Mike Taylor is a chartered surveyor and the senior partner of Barbers Rural Consultancy, Market Drayton.