The Energy and Climate Change Secretary is to introduce regulations to ensure that all landlords face minimum energy efficiency standards under the Green Deal.
Under the proposals, announced at Second Reading of the Energy Bill: From April 2016 landlords will not be able to refuse reasonable requests from tenants, or local authorities acting on behalf of tenants, to improve their property; and from April 2018 the government will make it unlawful to rent out a house or business premise which has less than an "E" energy efficiency rating, ensuring at least 682,000 properties will have to be improved.
The Green Deal is the coalition's national plan of home improvements to make houses and businesses cheaper to run through better energy efficiency. From next year, people will be able to access finance to pay for the upfront cost of work which will be paid back through savings on lower fuel bills.
The proposals will help the most vulnerable as more than a quarter of a million of the worst insulated rented homes are classed as fuel poor.
Energy and Climate Change Secretary Chris Huhne said: "Our proposals provide a voice for tenants living in poorly insulated, draughty homes. The Green Deal is a win-win opportunity for landlords by removing the upfront cost of work to upgrade the property making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.
"For those landlords who don't take up the Green Deal then we will get tough so that by 2018 the poorest performing rented housing stock is brought up to a decent standard."
In the budget the Chancellor George Osborne committed to introduce measures to encourage and incentivise the take up of the Green Deal ahead of its introduction in Autumn 2012.
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