The government’s plans to fund energy efficiency improvements in the private rented sector are financially unviable for most landlords, claims the National Residential Landlords Association (NRLA).

Under the proposals outlined by Energy Secretary Ed Miliband, landlords could be required to invest up to £15,000 per property to meet new energy efficiency standards. However, analysis of polling by independent research consultancy Pegasus finds that, on average, £7,700 worth of investment is the threshold beyond which meeting the Government’s targets becomes unaffordable for landlords.

This comes after the Budget cut total funding for energy efficiency schemes by a quarter over the current parliamentary term, according to think tank E3G.

The NRLA warns the government it must not rely on the false assumption that landlords are a single class of wealthy individuals with deep pockets to finance improvements.  

According to HM Revenue and Customs, the average rental income declared by unincorporated landlords is £19,400 a year – significantly less than the amount someone earns from a full-time minimum wage.

The lack of any bespoke support for the rental market in the Budget to meet the government’s energy efficiency plans comes despite calls by the Committee on Fuel Poverty for ministers to consider new tax measures to support the investments needed. 

As the sector waits for details of the government’s final plans, the NRLA calls for all energy efficiency investments to be made deductible against income tax.

The NRLA also recommends that the cap on the amount landlords will be expected to invest to meet the Government’s new standard should be graduated according to the value of a property. Unless this step is taken there is a very real risk of exacerbating a north-south divide, placing a disproportionately higher financial burden on rental properties in lower-value areas.

NRLA chief executive Ben Beadle says: “We want all rental properties to be as energy efficient as possible. However, this isn’t going to happen without a serious plan to support the investments needed.

“Relying on the misguided belief that every landlord has limitless reserves to fall back on is not only wrong but will not get tenants any closer to seeing their homes made energy efficient.

“If the government is serious about its plans, it needs to engage with the sector now to develop a clear, bespoke package to help responsible landlords invest in energy efficiency works. That needs to start by fixing a broken tax system which does nothing to encourage proactive property improvements.”