UK private renters could save billions if energy efficiency minimum is raised

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Raising the minimum standard of energy efficiency to a C rating for privately rented homes would save bill payers about ?570 a year, research has found.

This would amount to annual savings totalling ?1.75bn across the UK, according to the thinktank E3G in a report called Cutting Energy Bills and Raising Standards for Private Renters.

The government has been accused of dragging its feet on proposals that would require landlords to improve properties to at least a C rating under the energy performance certificate (EPC) scheme.

Two-third of rented properties are below that proposed minimum, leaving millions of people living in places that do not meet the legal definition of a “decent” home. One in four people renting live in fuel poverty.

Dan Wilson Craw, the deputy director of the campaign group Generation Rent, said: “By improving insulation and heating in private rented homes, landlords allow their tenants to heat their homes at less cost, which not only improves comfort levels, but reduces damp and mould, and the health problems they cause. The government has to go further, not just for renters but for the sake of the planet, and the country’s energy security.”

At present, landlords can let out homes that merit only an E rating, making them draughty and expensive to heat. But as tenants usually pay the heating bills, and with a shortage of available rental properties, landlords have little incentive to improve their lets with insulation, draught-proofing, double glazing and more efficient heating systems.

Ministers began a consultation on raising the minimum requirement for privately rented homes in 2020, with a view to forcing landlords to meet the EPC C standard from 2025 for new tenancies, and from 2028 for existing tenancies.

But these proposals have not yet been turned into legislation.

Colm Britchfield, a policy adviser at E3G, said: “The poor state of many rented homes is a growing national scandal. Tenants are facing sky-high bills, in part because so much energy is wasted in inefficient homes. The government has an oven-ready set of regulations to fix this. Now they need to put them into law.”

However, the National Residential Landlords Association (NRLA) said that even if the government took action now, it would be too late to introduce tougher requirements from 2025. The NRLA claimed the proposals were now in effect “dead in the water”.

Chris Norris, the group’s policy director, said: “The NRLA wants to see rental properties as energy efficient as possible. This will only be achieved on the basis of workable and realistic ambitions and policy from government.

“It is now two years since the government closed its consultation on energy efficiency standards in rented housing. Given the lack of any response to this it is unrealistic to think that in two years’ time every new tenancy agreement will be in a rental property with an energy performance rating of at least a C. When ministers finally respond to the consultation, they need a realistic set of targets.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “Thanks to government support, the number of homes with an energy efficiency rating of C or above has gone from 13% in 2010 to 46% and rising. We are investing over ?6.6bn to help decarbonise homes and buildings, and to ensure all homes meet EPC band C by 2035.

“The Energy Company Obligation runs from 2022 to 2026 and will help hundreds of thousands of families with energy-saving measures such as insulation, with average energy bill savings of around ?300 a year. Installations are now increasing, and we have announced a further ?1bn extension of the scheme to start in spring 2023.”

In his review of the government’s progress towards the UK meeting its legally binding target of net zero emissions by 2050, the former Tory minister Chris Skidmore warned about a failure to improve the energy efficiency of the UK’s housing stock. About 14% of the UK’s carbon emissions are associated with residential heating.