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 Post subject: 'Green tax' to hit landlords with £5,000 bill on buy-to-let
PostPosted: Sun Jul 31, 2016 9:10 am 
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'Green tax' to hit landlords with £5,000 bill on buy-to-let homes - -> http://www.telegraph.co.uk/news/2016/07 ... let-homes/

Quote:
Hundreds of thousands of buy-to-let homeowners will have to pay a “green tax” of up to £5,000 to make their properties more energy efficient, the Telegraph has learnt.

Landlords will have to pay upfront for measures such as insulation, cavity wall filling and new boilers from 2018. Until recently they could apply for loans from the Green Deal scheme for improvements, which are then repaid by tenants who benefit from lower bills. But the new Department for Business, Energy and Industrial Strategy is proposing owners provide the money.

The move will affect 330,000 buy-to-let landlords who own homes that are less energy efficient, often from the Victorian and Edwardian eras.

Richard Jones, policy adviser at the Residential Landlords Association, said: “Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront.

there is more



Easy to predict what will happen, those who can't afford the cost will exit the market as best they can by either selling out or even letting the property stay idle. As more exit that puts upward pressure on rental prices (depending on the location - if there are no jobs, there are no rents). Given these are Victorian and Edwardian houses there is a high probability they are subject to various restrictions as to the type of materials that can be used making upgrade costs more expensive, these buildings may not be suitable for upgrade at an economic cost. This also means there is a higher minimum price tenants have to pay for accommodation below which it is uneconomic to rent to them, so there are less new entrants and the scarcity of accommodation is maintained. Those who can afford to rent will get a higher standard of accommodation and the pressure to provide more low cost accommodation will fall on the local councils, which get passed on in the form of higher taxes. . . For the undesirables at the lower margins of society who rent the consequences will be fatal.

Landlords are price takers, they can't set the price higher than what their tenants will bear, push too high and tenants will eventually move when they can no longer bear the costs and figure a cheaper alternative.


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