Blog: Energy efficiency plans scrapped – but for how long?
NRLA deputy policy director Meera Chindooroy examines Rishi Sunak’s announcement that plans to introduce a minimum energy efficiency rating of C for privately rented homes have been axed, looking at what it means for landlords, and what happens next.
The Government asked for views on plans to introduce a minimum C rating for the energy efficiency of rental homes almost three years ago, yet since the consultation closed in January 2021 there has been notable silence on what any future policy would be – leaving landlords in limbo.
The Prime Minister’s big speech this week reset the UK’s approach to Net Zero and – perhaps temporarily – scrapped plans to require rented properties to meet higher energy efficiency standards from 2025.
While this is, in the short term, a reprieve for landlords already battered by the cost-of-living crisis, the question of what will happen long-term still remains.
Some certainty – for now
The Government’s original plans included proposals that landlords would have to shell out up to £10,000 a property to fund energy efficiency improvements, regardless of property value or location, should it fail to achieve a C grade.
The NRLAhas repeatedly stressed the risks of a one-size-fits all approach to finance across the country and the importance of tax breaks to facilitate improvements.
It also consistently pushed the Government to provide certainty to landlords on timescales, to allow them to factor energy efficiency improvements into their business plans.
The Government has clearly been listening to us.
Rishi Sunak’s speech emphasised the challenges of high costs for both landlords and tenants, as well as the importance of financially supporting property owners to complete works.
But does his claim that ‘we’ll never force any household’ to make ‘expensive upgrades’ hold?
The reality is that we are now in the run up to a general election. The Prime Minister evidently believes he will remain in power, but there is a very real possibility that we will have a Labour-led government in a year or so.
Net Zero – and its associated policies – has shown itself as a useful battleground ahead of the election, as seen in the Uxbridge and South Ruislip by-election.
The Labour Party has yet to respond in full to Rishi Sunak’s announcement, but Ed Miliband, the shadow secretary for climate change, has already said he is ‘in favour’ of requiring rented properties to meet a minimum EPC C rating.
In reality this means there is still no clear plan for the sector, something that will only serve to complicate landlords’ investment decisions.
Despite the rhetoric this week, Rishi Sunak doesn’t have the last word on this issue. But it’s not yet clear who will.
Is there anything I should do in the meantime?
Energy efficient homes are better for everyone. They minimise energy usage and therefore costs, making them more attractive for tenants.
And with energy use in residential properties accounting for around a fifth of UK carbon emissions, the sector will continue to be a key factor in reaching Net Zero.
If there’s a change in government at the next election, it’s almost inevitable that new regulations will be brought forward to compel landlords to take action. But of course, we don’t know exactly what that action will need to be.
Making homes as energy efficient as possible will help prepare them for low-carbon heating systems, such as heat pumps. Gas boilers are still planned to be phased out in 80 percent of homes by 2035 and the Government will be increasing the Boiler Upgrade Grant to install low-carbon alternatives to £7,500.
Many landlords are already improving the energy efficiency of their properties, when they are able to do so.
Turnover of tenants or void periods are useful opportunities to upgrade, and landlords can check whether they or their tenants are eligible for support through the Great British Insulation Scheme (GBIS) or local funding schemes.
More information
For more information on the NRLA’s campaign on energy efficiency, including its key asks of Government click here.
The NRLA runs an energy efficiency course for landlords keen to find out more about improving the performance of their rental properties. For more information click here.
