Written by Kate Hallewell
Attention landlords! Now is the time to see if your rental properties qualify for the government’s Energy Company Obligation grant scheme. The funding pot has £4 billion allocated to upgrade the least energy efficient homes in the UK.
This generous grant scheme is available for rental properties, providing tenants meet the household eligibility rules. The benefit to landlords? You could receive thousands of pounds worth of improvements to your investments.
The grants are available now. Landlords and tenants can use our free grant checker to see if they qualify and, if so, be connected with one of our 30+ trusted registered installers with direct access to funding.
ECO grants and energy-efficiency incentives have been around for a while, but many landlords don’t know whether their tenants and properties they lease could be eligible for grants.
In the current ECO4 scheme, there are funded grants for heating upgrades, smart thermostats, insulation, and incentives to switch to renewable technology such as Air Source Heat Pumps (ASHPs).
These schemes can help landlords ensure their rental properties meet the MEES (Minimum Energy Efficiency Standard) Regulations without the high price tag associated with normal property upgrades to address energy criteria.
1. What rules apply to landlords and what is an EPC?
Since April 1, 2020, landlords cannot rent out domestic properties with an EPC (Energy Performance Certificate) rating below E unless they have an exemption.
According to the UK government’s website advice on regulations for landlords, “If the property you let has been marketed for sale or let, or modified, in the past 10 years then it will probably be legally required to have an EPC.”
How to know if you need to take action:
- If you plan to rent a property with an EPC rating of F or G, you must improve it to E or register an exemption before starting a new tenancy.
- If you are already renting out such a property, you must improve its rating to E immediately or register an exemption.
- If the property is empty and you don’t plan to rent it out, no action is needed until you decide to rent it again.
The good news is that grants are available to assist meeting your property’s EPC requirements if your rental property has an EPC rating of E, F or G. Even better, the installer will assess the property as part of the application process and take care of the securing the EPC on your behalf.
2. What are ECO grants?
ECO stands for Energy Company Obligation, a government scheme that obligates energy companies to reduce carbon emissions and tackle fuel poverty.
In his foreword to the UK Government’s Response, Lord Callanan, Minister for Business, Energy and Corporate Responsibility, stated, “Insulating homes and installing more efficient heating systems not only reduces energy bills, it also makes homes more comfortable environments to live in, with the consequent improvements in people’s health and wellbeing. These changes have positive outcomes for individuals as well as for society and the economy.”
ECO launched in 2013 and it will run until 2026. The current phase is called ECO4. It began in July 2022 and is set to expire in March 2026 (or whenever energy companies reach their obligation).
At the halfway point of the ECO4 Scheme (May 7 2024), a total of 419,568 measures have been installed. These measures have been installed across 100,708 homes with each property receiving an average of 4.17 measures installed.
3. Explore ECO grant services for UK landlords
The biggest and most lucrative grant scheme available to landlords is the Energy Company Obligation, which provides funding for the installation of energy efficiency measures in qualifying rental properties. Tenants must meet eligibility criteria or the property must be in an area with high levels of fuel poverty. ECO isn’t to be confused with the Green Homes Grant which finished in 2021, whereas the Energy Company Obligation runs until 2026.
The ECO grant scheme places an emphasis on existing heating and the following grants could be available to UK landlords:
Wall insulation grants
Cavity wall insulation grants are available for properties with cavity walls as part of insulation measures where the main heating source is electric. In some cases, properties that are heated by gas boilers can be eligible. If your rental was built after the 1920s, it is likely to have cavity walls.
Internal wall insulation grants are available for properties with solid walls. If your property was built before 1920, it is likely to have solid walls. The existing heating needs to be electric in order to be eligible for this grant.
Loft or roof insulation grants
Loft insulation grants are available in rental properties where the existing main heating source is electric and where there is 100mm or less of existing loft insulation.
Room in roof insulation grants are available in rental properties where the existing main heating source is electric and where there is 100mm or less of existing loft insulation.
Heating grants
Boiler replacement or repair grants – unfortunately, these aren’t available to tenants or landlords.
Electric storage heater grants are available for rental properties where the existing heating is electric room heaters or where there is no heating.
First time central heating grants are available for rental properties. The property must not have had central heating previously and must not have had radiators previously. Your rental property is eligible for a central heating grant if insulation is possible and it must be installed at the same time (according to the funding rules). Sometimes, smart thermostats are also included in the grant package.
4. Boiler Upgrade Scheme grants for UK landlords – England and Wales
The Boiler Upgrade Scheme (BUS) offers landlords in England and Wales the opportunity to replace inefficient fossil-fuel heating systems, with funding for options such as:
- £7,500 towards an air source heat pump
- £7,500 towards a ground source heat pump
- £5,000 towards a biomass boiler (for properties with solid fuel heating)
Landlords and other property owners can get these grants towards the installation of heat pumps and, unlike other energy-efficiency grant schemes such as the Energy Company Obligation, there are no requirements to claim benefits or meet income rules.
However, the property will need to be suitable for a heat pump.
Find more information about Ofgem’s Boiler Upgrade Scheme here.
5. Who can apply for an ECO grant?
Grants can be applied for by landlords, homeowners and tenants. However, where the property is privately rented, the application has to be submitted in the tenant’s name and both the tenant and landlord will need to consent to work being undertaken.
There are three main routes to grant eligibility.
Eligibility criteria 1: tenant is claiming or has claimed benefits
The property is rented to tenants who have claimed benefits within the last 12 months. There are no income rules if the following benefits have been claimed and the tenant doesn’t need to be currently claiming.
Eligible benefits include:
| ECO4 Qualifying Benefits |
|---|
| Child Benefit* |
| Child Tax Credit |
| Employment and Support Allowance (ESA) – Income Based |
| Housing Benefit – new eligible benefit |
| Income Support |
| Jobseekers Allowance (JSA) – Income Based |
| Pension Credit Guarantee Credit |
| Pension Credit Savings Credit – new eligible benefit |
| Universal Credit |
| Working Tax Credit |
To receive a grant, your tenant will need to provide evidence that they (or someone living at the property) has received the benefit. Installers then have to carry out a ‘data match’ to evidence eligibility.
* Child Benefit (see ‘Eligibility criteria 2’ for additional information)
Eligibility criteria 2: tenant receives Child Benefit
If your property is rented to tenants that claim Child Benefit, they could be eligible. However, where Child Benefit is the only benefit received, the tenant will need to meet additional income rules.
To qualify for an ECO grant through this route, the tenant’s household income must be less than the rates below (before tax):
Single Person Child Benefit Income Thresholds
| Number of children | Maximum income |
|---|---|
| 1 | £19,900 |
| 2 | £24,800 |
| 3 | £29,600 |
| 4+ | £34,500 |
Couple Child Benefit Income Thresholds
| Number of children | Maximum income |
|---|---|
| 1 | £27,500 |
| 2 | £32,300 |
| 3 | £37,200 |
| 4+ | £42,000 |
To receive a grant, your tenant will need to provide evidence that they receive Child Benefit and provide evidence of income (e.g. bank statements, payslips or tax returns).
Eligibility criteria 3: ECO4 Flex Scheme – eligibility supported by local authority
ECO4 Flex is a voluntary method that allows local authorities to identify and refer low-income, vulnerable, and fuel-poor households.
The new ‘ECO4 Flex’ category provides funding to:
- those with a household income (before tax) of less than £31,000 per annum
- vulnerable households (including having debts, being older or having young people in the household)
- those with health conditions (such as cardiovascular diseases, immunosuppressed individuals, those with mobility issues and people with respiratory conditions)
If your tenant meets local authority flexible energy criteria, then it is likely that your property will qualify for a government home upgrade grant.
In the ECO4 Flex Scheme, councils have to publish a Statement of Intent before applications can be submitted by installers. Many councils have submitted their Statement of Intent but, unfortunately, some Councils have not, which prevents applicants from accessing these grants until such time as they do.
ECO4 Flex applications require the installer to submit an application to the council and the council will provide a declaration of eligibility.
6. How to apply for a grant
Use our simple eligibility checker to see what’s available for a home upgrade grant to your rental property.
You’ll need to answer a few questions about the property and tenants, then you’ll get an immediate result showing whether you qualify or not. Once you have submitted an application, we’ll liaise with the tenants.
7. The benefits of applying for grants as a UK landlord
ECO grants are the perfect opportunity to upgrade your rental property and help your tenants to save money on their utility bills.
Feedback to date is that the grants have been a lifeline for landlords and tenants:
- giving tenants affordable, warm homes, as well as
- being a smart, money-saving way to guarantee your property complies with the government’s Minimum Energy Efficiency Standard (MEES).
Find out if you’re an eligible landlord today or email us if you’d like further information.