Confusion and government delay means tenants are paying extra to heat draughty homes
Plans to make homes warmer and more energy efficient have stalled, leaving private landlords and the home insulation sector in limbo, according to a report.
Research from Shawbrook bank has found that 71% of landlords own at least one property that has an Energy Performance Certificate (EPC) rating of D or below. The EPC is a measure of how energy efficient a property is, with A being the most efficient.
The wider impact has been tenants in colder homes having to pay more to stay warm at a time of excruciating fuel price hikes and a cost-of-living-crisis. It is also jeopardising ambitions to tackle climate change.
Proposals were put forward four years ago for properties with new tenancies in the private rented sector to obtain a more stringent EPC rating of C or above by April 2025. For all existing tenancies the rules were supposed to come into force in April 2028.
However, the changes have not yet been put into law, leaving the sector facing uncertainty, with some landlord groups arguing that these deadlines are now no longer achievable.
Chris Norris, Policy Director, National Residential Landlords Association (NRLA) said “a lot of people” mistakenly think the change is due to come in but it hasn’t been put into effect yet.
He added: “We would like to think they would have slipped the deadline because 2025 was very difficult when we thought we'd have four years to get there. I think it will be nigh on impossible, if let's say, they publish early next year and we have two years to get to it.”
Norris added that he would be “very surprised” if the insulation industry and alternative energy suppliers - such as heat pump manufacturers and engineers - could ramp up enough capacity to retrofit homes to meet a ‘C’ EPC rating within those time frames.
He also argued that there was confusion over how the EPC would be measured going forward, whether it would be under the existing measure that focuses on cost, or a new method with a focus on carbon. This is an important consideration because gas boilers, for example, are cost effective but produce more carbon than heat pumps, which are currently prohibitively expensive.
A change in the law could hopefully kick-start the industry into ramping up skills and supply, and this should also bring costs down.
“A big part of [the law’s] success will be to make sure the package we have got in the Renters Reform Bill gets though.”
But whether a more stringent EPC minimum standard will make homes warmer and more energy efficient will depend on other reforms, argued Dan Wilson Craw, Deputy Director, Generation Rent, a campaign to stop renters being unfairly evicted from their homes. He warned that tenants will need to be able to raise alarm bells about properties that don’t meet these standards without fear of eviction retaliation.
He said: “Even with the minimum standards we still have concerns that without protection for tenants it’s going to be quite hard to enforce. A big part of its success will be to make sure the package we have got in the Renters Reform Bill gets though.”
Craw added that, in the meantime: “Tenants live in often very damp and draughty homes with energy bills having gone up, and despite the [government] support, we wouldn’t be paying so much more for energy if homes were upgraded to where they should be. It’s hitting tenants in the pocket”.
Emma Cox, Managing Director, Real Estate at Shawbrook warned in the foreword of the report: “Perhaps the top priority is for policymakers to confirm their plans, so landlords know exactly where they stand on regulation. A failure to act risks making thousands of landlords’ businesses unviable in the long-term, stretching the supply of rental housing to breaking point.”
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