Think tank finds almost 80 per cent of landlords want stricter energy efficiency rules on their properties, including raising minimum standards on rental properties
More than three quarters of landlords support the idea of raising the minimum energy efficiency standard (MEES) on rental properties, according to a new report from by the Social Market Foundation (SMF).
The cross party think tank found that 79 per cent of landlords surveyed believe they should be subject to stricter energy efficiency regulations, with private sector landlords more supportive of raising the MEES requirements to a band C rating than the general population – with just 11 per cent of respondents opposed.
The SMF previously highlighted that private renters in England and Wales are on track to waste £1.1bn – or £220 per household per year – due to the poor energy efficiency of rented properties.
The MEES is currently set to an Energy Performance Certificate (EPC) rating of band E, which means landlords are only allowed to lease properties if it get an E energy efficiency rating or higher.
The government had planned to strengthen the standard, but in September Prime Minister Rishi Sunak controversially scrapped plans requiring all landlords to upgrade their properties to at least EPC C rating by 2028, citing the need to protect tenants from unfair price hikes in rent due to the cost of renovations.
Some landlords welcomed the move, having argued the government had left it too late to confirm the new standards and failed to put in place a support package that would help them manage the cost of property upgrades.
But others have become frustrated at the uncertainty created by the government’s U-turn and are now concerned the goalposts could be moved once again in the next Parliament, according to the SMF, while others are frustrated at having spent substantial sums on improving their properties, only to discover the rules had been scrapped.
Niamh O Regan, researcher at Social Market Foundation, said that British homes are on a “dismal trajectory” when it comes to improving energy efficiency and failing to improve the efficiency of the private rented sector will result in higher costs for tenants.
“Recent government actions seem to suggest that renters can either have energy efficient homes or affordable rents – but this is a false logic,” she added. “Poor energy efficiency is currently costing them millions.
“Instead of trying to understand landlords and how they can be motivated to better insulate their properties, the government would rather kick the can down the road, pushing us further and further from greener, healthier and more net-zero friendly homes.
The report also argued that local authorities have a key role to play in increasing low levels of landlord and owner-occupier trust in the insulation industry, suggesting they could create “one stop shops” for advice and information.
Moreover, the SMF recommended that installers should be accredited by government or a trade body to assure consumers of quality of work, reliability, and trustworthiness.
The report added that while homeowners are increasingly seeing the benefits of insulation, they require “nudges” – such as checkpoint reminders and new financial products – to undertake improvements.
A Department for Energy Security and Net Zero spokesperson said: “The government’s record on energy efficiency speaks for itself, with almost half of all homes in England now having an EPC rating of C or above, up from 14 per cent in 2010.
“We understand the concerns tenants and landlords have over energy efficiency and have allocated over £12bn to energy efficiency and low carbon heating during this Parliament to help create homes fit for the future, while easing the pressure on property owners by removing burdensome targets.
“Under the Great British Insulation Scheme, we estimate more than 300,000 of the UK’s least energy efficient homes will also be improved up to 2026 – helping to heat homes and save families money on their bills.”
In related news, Lloyds Banking Group last week released its first Housing Stocktake 2023 report revealing that 42 per cent of landlords aware of the government’s decision to scrap requirements for rental properties to reach an EPC C rating by 2028 said they had cancelled plans to invest in efficiency measures, while 53 per cent said the decision made them less likely to invest in green measures moving forwards.
According to the study, UK homes are one of the highest emitting sectors of the economy, with 28 million residential properties accounting for 16 per cent of the UK’s total carbon emissions.
And while the report reveals that nearly six-in-10 homeowners think it is important to make their property ‘net zero ready’ by 2035, 69 per cent have not taken any action to make improvements in the last five years, with half of homeowners put off green home improvements by high up front costs.
The SMF’s report also coincides with news that Swedish clean energy firm, Aira, has today launched in the UK with a pledge to invest £300m over the next three years to help one million UK customers switch from gas boilers to a clean energy-tech solution in the next decade. Rolling out a service it has positioned as a “Netflix of home heating”, Aira will offer a monthly payment model with zero upfront cost in the hope of making heat pumps more affordable and accessible for households in the UK.