Hello readers. It’s been a busy week! I have received a great deal of enquiries from investors wanting to make the most of the stamp duty cut before there are any increases to property prices caused by a rise in demand.
In this week’s blog, I wanted to focus on the Green Homes Grant – one of the new schemes announced by the Chancellor in his ‘mini-budget’ on 8th July – and review the potential benefits it could have for landlords.
What is the Green Homes Grant?
The Green Homes Grant is funding of up to either £5,000 or £10,000 to go towards making homes more energy efficient.
I have spoken with the NRLA and can confirm that those on a ‘higher income’ will receive a grant of up to £5,000 to fund a maximum of two-thirds of improvement costs whereas those on a ‘lower-income’ will receive full funding to cover up to £10,000 of costs.
Full details are yet to be released; however, it is expected that any funds received can be used to cover the costs of installing or improving at least the following:
- Wall insulation
- Roof insulation
- Double glazing (windows, doors, etc)
The scheme includes landlords and applications are invited from September; the ARLA has confirmed grants can be applied for through the Simple Energy Advice Website.
The ARLA explains that there will be some basic questions about the property and once these have been completed, applicants will be advised which energy efficiency measures and accredited local suppliers are recommended.
Following this assessment, vouchers will be issued, and the final payment will be made when the improvement has been carried out by an accredited supplier.
I will update you when full details are available and look forward to publishing a Q&A style blog. It would be interesting and insightful to explore differing scenarios. For example, if a property has double glazing would the grant cover an upgrade to a better-rated window? How will the grant work for refurbishments? How will the funding threshold be decided for landlords? If you have any questions regarding the scheme, please let me know to provide some food for thought for discussion.
What does this mean for landlords?
Whilst we are awaiting the exact and final details, it is broadly understood that landlords, as well as homeowners, will be covered by this scheme. I think this is brilliant and something that I know has very much been welcomed by landlords.
For those who have recently completed an HMO conversion or have a high-quality HMO, eligibility for the grant may be unlikely as they will probably already have the correct measures and standards in place.
However, when applications do open, I would certainly recommend every landlord reviews their portfolio to assess which areas would best benefit from the scheme. For example, insulating a loft space that may normally cost around £600 could cost as little as £200 if this is eligible under the scheme.
I would love to hear what you think! I sincerely hope that this will help make a difference to the thousands of sub-standard properties owned by rogue landlords – although, unfortunately, I doubt that all will take advantage of it.
It is, however, a shame for the construction sector that the Green Homes Grant won’t be implemented immediately – as the cut to stamp duty has been. There is a strong likelihood that homeowners will hold off from starting works on properties to see if they would benefit from a grant in September.
I think that starting the funding process for these home improvements now would surely give the construction industry the boost it so desperately needs following recent slowdowns due to the COVID-19 pandemic.
As always, I would be happy to answer any questions you may have in relation to your property investments – and don’t forget to let me know your thoughts regarding the Green Homes Grant Scheme. The best way to contact me is via LinkedIn.
Hasan
Medway Property News 