When Housing Secretary Michael Gove introduced the Renters (Reform) Bill to a great fanfare, he promised to deliver ‘a once in a generation’ overhaul of housing laws and that 11 million tenants across England would benefit from safer, fairer and higher quality homes.
This was meant to include energy efficient homes – to reduce heating costs and to improve the comfort of residents.
Afterall the Government had begun a consultation exercise more than two years ago on proposals to force private sector landlords to bring all of their rented properties up to an energy rating of C, as measured by energy performance certificates.
Around a third of all fuel-poor households across England live in the private rented sector
Patrick Mooney News editor of Housing Management and Maintenance magazine
Millions of cold rentals need improvements
In the intervening years, Ministers have failed to give any sort of update on how the responses might be affecting their plans – which we were repeatedly told are a vital part of the plan to meet our net zero carbon emissions targets.
Landlords repeatedly demanded updates. Not really surprising given the huge numbers of properties affected (about 3.4 million) and the extraordinary sums of money required (it runs into the £ billions).
Then out of the blue and in a newspaper article rather than in a statement to Parliament, Mr Gove announced that he was having second thoughts on the timetable for bringing in the changes and he wanted to relax the deadline.
In the Daily Telegraph, the Housing Secretary said the proposal to ban landlords from renting out their homes unless they pay to increase the energy performance certificate rating of their properties should be pushed back past 2028, to some unspecified date.
Slowing down the changes
Mr Gove said: "My own strong view is that we're asking too much too quickly... I think we should relax the pace." He also warned about "treating the cause of the environment as a religious crusade" as he called for "thoughtful environmentalism".
Was he trying to kick the issue into the long grass and improve relations with private landlords? It’s possible we won’t know until Mr Gove decides to write his political diaries some time after the next General Election. But lets not forget that Mr Gove was the Environment Secretary when the 2050 net zero pledge was made by Prime Minister Theresa May (remember her?).
The upgrade required to increase a property's energy performance could include fitting a heat pump, providing insulation or installing solar panels, which could cost thousands of pounds per rental. None of this was to be funded by the Government.
Never a hope
In response to Mr Gove’s newspaper article, Ben Beadle, Chief Executive of the National Residential Landlords Association, said: "It is over two years since the Government completed its consultation on energy efficiency standards in rented homes.
“As a result of the delay in responding to this, there was never any hope of meeting the originally proposed deadlines, as we have repeatedly told the Minister.
"The NRLA wants to see properties as energy efficient as possible, but the sector needs certainty about how and when this will happen.
Mr Beadle added: “Ministers need to develop a proper plan that includes a fair financial package to support improvements in the private rented sector. We will continue to work with all parties to develop pragmatic and workable proposals.”
The problem is huge and needs fixing
Now might be a good time to remind ourselves how we got to this position. Around 3.4 million private rentals have an EPC rating of D or below (which is almost half of all private rentals). These are the costliest homes to heat and 19.4% of PRS households are in fuel poverty.
This means around a third of all fuel-poor households across England live in the private rented sector, despite the sector accounting for only a fifth of all households in England.
Amongst EPC F and G rated properties in the sector, recent data shows that over 40% of households are classified as fuel poor. Put simply, the PRS has a disproportionate share of the UK’s least energy-efficient properties and fuel-poor households. Installation of energy efficiency measures can help address this.
Of the millions of PRS properties below EPC C, over 600,000 are off the gas grid (of these approx. 380,000 properties are in urban areas, 60,000 in towns and fringe areas, and 180,000 in rural areas). 76% of PRS properties in Wales are below EPC C.
Strong case in favour
When the Government was seriously thinking about doing something to alleviate the situation, it argued that there was a strong economic case for improving the worst PRS homes. It set out the following argument in favour:
Society – Lower energy use, freeing up fuel/power/resources to be used elsewhere in the economy; improvements in air quality from lower fuel use; reductions in greenhouse gas emissions
Landlords – Investment benefit (Property value uplift: B and C-rated properties have a green sales price premium of five percent compared to D- rated); Business benefit (reduced maintenance costs + shorter void periods)
Tenants – Lower heating costs (the average annual bill for a C-rated home is £657 - compared to an EPC E home which is more than double at £1,425); improved thermal comfort and health as result of warmer homes
All of this is now being put at risk! The environment loses out and so do tenants living in the private rented sector, who will face higher energy bills and more discomfort, in their own homes.
More positive news from home owners
Meanwhile there was more positive news emerging from the home ownership sector. British households are making more green energy upgrades than ever before after installing a record number of solar panels and heat pumps in the first half of the year, according to the industry’s official standards body.
The industry figures show there were more green energy installations in June alone than in any six-month period in previous years.
On average, more than 20,000 households installed solar panels every month this year, while the number of homes installing heat pumps reached 3,000 a month for the first time, according to the data.
Each month of 2023 was a record month for battery technologies, as installation figures consistently surpassed the month before, bringing the total number of batteries installed in homes and businesses across the UK to more than 1,000 in 2023 so far.
Huge job of work to do
But before we get too excited, please remember the Government has set targets to install 600,000 heat pumps a year by 2028. But the uptake of heat pumps has fallen far short of this aim, despite the £5,000 grants to reduce the cost of replacing an old gas boiler.
In total there were 17,920 heat pump installations in the first six months of 2023, according to MCS data, meaning that if the same pace continued over the second half of the year, heat pump installations would reach just 6% of the official target.
Bean Beanland, the director of external affairs at the Heat Pump Federation, said there was “a tremendous job of work to do” to ensure that heat pump technology becomes mainstream over the remainder of this decade.
He added: “It is essential that the lowest-carbon heat becomes the lowest-cost heat, so that homeowners and landlords can justify the transition away from polluting fossil fuels. If this is coupled to a genuine affordability and future funding package, then households will be able to contribute to climate change mitigation with confidence and at a cost that is fair to all.”
Now if only Mr Beanland can direct his thinking to how the private rented sector can get its act together and landlords can voluntarily start making the necessary changes to meet the original timetable, then we could end up with happier tenants and a greener environment.
Patrick Mooney is news editor of Housing Management and Maintenance magazine
