Energy efficiency - what you need to do when embarking on your retrofitting journey
The braziers are not burning yet, but the parallels to the 1970s are there. As the cost-of-living crisis bites, the Government is mapping out its worst-case scenario response for energy shortages this winter. For the first time in recent memory gas and electricity rationing is being given serious consideration. The impact of inflation on international energy markets post-Covid and the ongoing war in Ukraine are also likely to continue to cause chaos on the wholesale energy market this summer.
Alongside this volatile backdrop, measures to reduce carbon emissions mean that many households are facing up to the question of how to light and heat their homes. With the cap on energy costs set to go up again in October, this is an issue which needs to receive urgent attention from the Government.
But what is the best way to reduce energy demand and heat your home?
The Government has many levers to pull to help facilitate the transition to an energy efficient future, but which ones should be pulled, when should they be pulled and by whom?
Overall, energy use in homes accounts for about 14% of the UK’s total greenhouse gas emissions. The need to cut these in our homes is necessary if we are to meet the challenges produced by climate change.
With this in mind, the Government has consulted on raising the minimum energy efficiency requirements to a C rating by 2025 for new tenancies and 2028 for existing ones.
This raises the question of how (and when) you should take action. Should you wait until the price of retrofitting comes down? What overall approach should you take? If you’re a landlord asking yourself these questions, it’s important to bear in mind the need to tailor your approach to your particular circumstances.
Making improvements to homes so that they are warmer and more efficient is an obvious starting point. It reduces waste and makes the property a more desirable place to live. To understand how to live in a property is just as important - sealing them up and not allowing air flow creates problems in the long run. Ultimately, government policy in this area needs to be nuanced so that it takes into account different property types and ages as well as the people living in them.
The NRLA supports a fabric-led approach to the improvement of housing. Only once the fabric of properties is adequately improved, can one begin to address a property’s heating system. To do otherwise would involve an increase in cost, since many properties will need to have an expensive oversized engine installed to meet their heating requirements.
Ultimately, is it possible for the Government to take a ‘one size fits all’ approach when it comes to what it expects landlords to do? The short answer is no.
The state of the UK’s property market varies massively across the country and, while some landlords are not encumbered with debt and have the ability to borrow, some are not in such a fortunate financial position. In particular, the difference in property values across different regions has an impact on the way that a person will look at improving their properties.
This was outlined in a recent report by Localis (published in collaboration with the NRLA), which reveals the extent of these vast differences in property values across the UK. These disparities obviously create significant challenges with respect to the cost of retrofitting properties to make them more energy efficient. Ideally, these costs would be determined by local market circumstances. The best way to do this would be an escalator based on the LHA (Local Housing Allowance) rates, reflecting the different value of properties. This would allow for sensible investment in properties and wouldn’t force a correction in the market which would leave people unable to pay rent.
So as the sun shines down on us this summer, sitting down to audit your properties and understanding what is required to improve the fabric of the properties you own is a worthwhile exercise. Considering what steps you can take to ensure your property receives an Energy Performance Certificate ‘C’ rating might be the best use of your time. Once you’ve done this, you can map the journey of your properties from energy inefficiency through to the point where they comply with EPC requirements.
Most importantly, now is the time to ask those specific questions you need to pose to make your properties more energy efficient. Like, what does my property need to do to get to a ‘C’ on the Energy Performance Certificate and how do I do it? Equally how do I finance it? Ultimately, before you take action, preparation needs to be your watchword. Only then can you take the steps necessary to improve your properties once the regulations are published and the full details emerge.
The NRLA is campaigning for solutions to enable landlords across the country to upgrade their properties in anticipation of future regulations and support landlords to be proactive in decarbonising the sector. This includes
- More targeted funding and financing for landlords
- Reduce cost through tax efficiency.
- Building Renovation Passports to replace EPC system
Learn more about the NRLA's energy efficiency campaign.
