Rotorua landlords lag behind homeowners in taking up a government offer for free home insulation - but the head of the Rotorua Property Investors Association says many are paying for it out of their own pocket.

Almost 400 owner-occupied properties have been insulated under the scheme, compared with just under 200 rentals.

The Green Party says the figures - obtained by the Rotorua Daily Post this week - confirm fears the publicly subsidised scheme would fail those who needed it the most.

The chief executive of one local insulation company confirmed most of his work was with owner-occupied homes.

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"I'm not sure the reasons why we don't work with more landlords. Maybe renters don't think the scheme applies to them," said Anaru Marshall of WISE Better Homes.

Mr Marshall said he had only positive things to say about the scheme.

"It's been well overdue and really, when you look at the downstream benefits that it provides in terms of health, education and employment, it's a fantastic programme."

However, Rotorua Property Investors Association president Debbie van den Broek said she would dispute any claims landlords were not insulating.

Mrs van den Broek said the figures could be because many found it cheaper and easier to purchase the insulation themselves and have it fitted by a handyman.

The New Zealand Property Investors Federation offered deals where members could buy the insulation at a lower cost, she said.

"Most landlords I know have gone in and insulated their properties."

Many tenants wanted properties that had heating and insulation and would not consider houses that were not insulated.

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"If you've got no heating and no insulation in Rotorua, you won't get a good tenant."

Nationwide, only a third of the 36,000 homes retrofitted with insulation since the Warm Up New Zealand: Healthy Homes initiative kicked off in September 2013 were rentals.

It is estimated more than half of properties needing insulation are rentals.

Under the initiative, homeowners or tenants are eligible for free or reduced cost insulation if they have a Community Services Card and the house is occupied by someone under 17 years or over 65 years.

In some regions, people at risk from illness linked to cold, damp housing are also eligible.

Green Party co-leader Metiria Turei said the party predicted the scheme would fail renters and this had been proven true.

"Landlords who are only interested in their immediate profit have no incentive to be good landlords."