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Last updated: 24 May 2022
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How to choose energy for my tenants
As a landlord you will have lots to think about, not least of which is making sure your tenants have an energy supply and can cover the bills! There are two main choices for how to manage energy for your rental property:
- Let your tenants choose their tariff and pay their bills.
- Arrange your tenants energy supply, either charge them separately or make the rent with bills included.
You will also need to decide what kind of energy meter is best for your property.
Choosing a prepayment meter will ensure that your tenants don’t go into energy debt and might encourage them to keep their usage low. However, it’s often the most expensive choice meaning your tenants may want to change to a credit meter.
If you choose a credit meter you or your tenants will pay for energy after it has been used. You will need to decide whether you or your tenants manage this. Remember that if your name is on the bill you are responsible for payments.
Supplying energy for buy-to-let properties
If you decide to manage the energy for your buy-to-let property it’s a good idea to compare energy tariffs to make sure you are getting the best possible deal.
If you are not paying for energy use then cheap energy may not be your priority, but it might be your tenants’. Making sure your property is energy efficient can help save money and make your property more desirable. Plus, you now need to meet a minimum level of energy efficiency if you want to stay in the private rental market.
It is also worth remembering that you cannot refuse a tenant’s reasonable request for energy efficiency improvements. This means you may want to think about home insulation, draught-proofing or updating appliances before putting your property on the market.
Landlord Energy Performance Certificate
If you want to rent your property you will now need an Energy Performance Certificate. This document gives your property an energy efficiency rating from A to G. It will also contain information about your property’s energy usage alongside recommendations for how to reduce energy waste.
An accredited energy assessor produces a survey for your house showing its current rating, and its potential rating based on the improvements you could make.
Even if you meet the minimum standard, making some small improvements could make your property more desirable for prospective tenants.
Sustainable Energy Tips for Landlords
Increased energy efficiency is great for your property, your tenants and the planet. There are a few simple things you can do to invest and improve the energy efficiency of your property:
- Insulation is a simple way to increase your EPC rating. Loft insulation can make the biggest difference, but if your buy-to-let is detached or semi-detached then you may want wall insulation too.
- Installing double-glazing means less heat will be lost through windows and doors (it also reduces noise pollution too)
- Taking simple draught proofing measures can make a difference to the amount of heat your property loses.
- Use LED lighting, they significantly reduce energy consumption and last for a long time.
- Replace your old boiler for a newer and much more energy efficient boiler. Having a timer setting can also ensure your tenants use their heating for efficiently too.
If you are looking to reduce energy usage, these changes could be what you need.
Can I get help to make my buy-to-let energy efficient?
If you do need to improve the energy efficiency rating of your rented property, you may be eligible for financial support.
You might be lucky enough to find a Green Deal scheme to help you make energy-saving improvements. Green Deal schemes are hard to come by, but they will cover things like insulation, heating, draught proofing, double-glazing and sometimes even solar panels. The scheme will apply specifically to the property, so you will need to notify any subsequent tenants about Green Deal repayments.
The Energy Company Obligation is a government scheme designed to reduce carbon emissions. It’s aimed at low-income and vulnerable households so if your tenants fit this category then you may be able to get help.
If you pay corporation tax, or have a large property portfolio the Enhanced Capital Allowance will let you claim 100% of the tax back on any eligible energy saving technologies you’ve invested in.