The new Labour government has confirmed that they will require all private rented sector properties to reach an Energy Perform Certificate rating of A-C by 2030. “This government is committed to reducing the number of fuel poor households in England,” stated the Minister for Energy Efficiency, Miatta Fahnbulleh, in early August 2024. “Ensuring warmer, healthier private rented homes will lift many families out of fuel poverty and reduce energy bills.”
The TDS Charitable Foundation’s Voice of the Tenant survey has highlighted the issue of poor energy efficiency in the private rented sector. This annual representative survey with 2000 tenants, last run in March 2024, revealed that 47% of tenants felt that the energy efficiency of their home could be improved. Many (45%) stated that they were finding it difficult to afford their utility bills, and this proportion increased for tenants with long term physical or mental health conditions (51%), in receipt of benefits (59%), and for single parents (66%). However, 57% of private renters had not asked their landlord for energy efficiency improvements, with fear of rent increases being the primary reason why improvements were not requested.
Despite the obvious benefit of improving the energy efficiency of private rented properties, there are several obstacles that need to be overcome. One is the current pace of improvement in the sector, which, according to the Hamptons July 2024 rental index, means that the government’s 2030 target remains optimistic. Unless the rate of improvement is increased, it will take landlords until 2042 to bring all privately rented homes up to an EPC rating of A-C.
There is also the question of the ability of landlords to meet his target, particularly the additional costs involved. The TDS Charitable Foundation’s Voice of the Landlord survey, published in August 2024, found that sixty percent of landlords already experience challenges in relation to making repairs or maintaining their properties. While these challenges vary, over half of landlords cited difficulties in meeting the cost of repairs and maintenance, and 9% spoke specifically about the challenge of meeting minimum energy efficiency standards. Furthermore, the survey showed that 61% of landlords had increase rent of their properties in the past 12 months, with 45% citing increased the costs of property maintenance as the reason, showing that energy efficiency improvements could possibly lead to higher rents for tenants. While there is government support available for energy efficiency upgrades in the private rented sector, eligibility criteria means that a significant number of properties are excluded from this.
In order to ensure their new targets can be effectively met, the Labour government should consult with different groups of landlords to understand their circumstances, and consider broadening the support they offer. Ultimately, improving the energy efficiency rating of properties in the private rented sector will help tenants, benefit landlords by potentially increasing property value, and play a part in the fight against climate change – something that concerns us all.
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