Fewer homes and higher rents the true cost of energy efficiency plans
The Government’s ambitious and expensive energy efficiency plans would need to see a massive 5,000 homes a day retrofitted to meet new targets. Here NRLA Chief Executive Ben Beadle – who has written to Energy Minister Miatta Fahnbulleh, on the issue – spells out why the plans are unworkable and what needs to change.
Bills of up to £15,000 per property; 2.5million rental homes needing work; a three-to-five-year timescale and last, but by no means least, a shortfall of 166,000 tradespeople.
You don’t need to be a maths wizz to see that these figures just don’t add up.
The Government went public with its ambitious plans to transform energy efficiency in the private rented sector last week, with what can only be described as unworkable proposals set to unrealistic timelines.
The stringent plans will see landlords hit with bills of up to £15,000 per property to bring them up to a minimum EPC C grade by 2030 or have them pulled from the market.
And it would seem the clock is already ticking when it comes to getting work done.
Tight deadlines
The 2030 compliance deadline, as tight as it is, doesn’t tell the whole story.
According to the Government’s consultation document regulations will not be confirmed until late 2026, after which landlords will be expected to ensure any property subject to a new tenancy hits EPC C by 2028, with all other rentals following shortly behind in 2030.
So, in reality, that gives us a window of just three and a half years.
To meet this deadline rental homes would need to be retrofitted at a rate of 5,000 per working day a proposal which, quite frankly, is madness.
And it doesn’t end there.
An earlier consultation into the ways in which EPCs are calculated is only due to end this month, meaning even landlords who have already achieved a C or above may see their homes rebranded once the changes come in.
What is even more frustrating is that we could have told the Government all this if they’d been willing to have a conversation with us before going public.
As the country’s largest landlord’s association and a key stakeholder in this policy area, we were extremely disappointed to have been told about the consultation by a journalist just hours before it was made public.
This is despite regular meetings with energy ministers about the challenges within the sector.
As I have said in my letter to Energy Minister Miatta Fahnbulleh, if the Government is serious about achieving its ambitions, it must engage with those directly responsible for delivering them.
What do we think needs to change?
When BBC Breakfast put our points to Energy Secretary Ed Miliband following the announcement on Friday, he made light of the situation, but the reality is rents will go up and homes will be lost – and this is no laughing matter.
If we are to see the wholesale upgrading of the private rented sector, then it is clear there is a big job ahead of us.
The fact that just over 2.5 million private rented homes still have an Energy Performance Certificate rating of D-G is, in part, due to a disproportionate number of properties in the private rented sector – around a third – being built pre-1919, making them some of the hardest to improve.
What we are asking for is a clear strategy, with a comprehensive package of support across the board and a realistic implementation timetable.
When similar proposals were previously considered, the expectation was that landlords would have at least eight years to make improvements, which is why we are calling on the Government to introduce a 10-year implementation period to allow the sector to meet the ambitions set out in the consultation.
We also need a clear plan to address the shortage of skilled tradespeople which is estimated by independent sources to hit 250,000 by 2030.
Who will foot the bill?
Estimates suggest that upgrading the private rented sector to the proposed standard could cost over £20 billion, yet there is no mention of dedicated financial support available across the board, nor active consideration of tax efficiencies for landlords – and this needs to change.
Most landlords are not the fat cats the media may make us out to be, with 70% basic rate taxpayers and 93% individuals, almost half of whom rent out just one property.
Even the Government’s estimated average spend of just over £6,000 per property will hit landlords hard. And, as a business, their only option is to recover this through rents over time.
Recouping just half of this figure over a 10-year period would equate to an extra £300 a year on rents, compared to the £240 the Government says tenants will save on bills per annum; hardly a great deal.
There is also a real risk of a geographical divide, with landlords where homes command lower rents struggling to finance improvements. There is also the risk that some will simply leave the sector altogether, further deepening the current housing supply crisis.
For these reforms to work, they must be fair, practical, affordable and achievable.
The NRLA is not against improving the energy efficiency of homes, far from it; we are committed to working with the Government to deliver meaningful change; but we need to be realistic about what is achievable, and to what timeframe.
I have now asked to meet the minister to talk through the proposals in detail and will continue to lobby for a workable timescale and a comprehensive funding package to find a way forward that will work for all.
More information
- To read the letter in full click here.
- To watch a video outlining the new proposals click here.
- For more information on the NRLAs ongoing energy efficiency campaign click here.
- The NRLA’s award-winning Training Academy also runs a course on energy efficiency for landlords and a new retrofit course.
- Part of the NRLA family, Safe2 is the leading provider of property safety certificates, including EPCs, with exclusive discounts available for NRLA members. Visit nrla.org.uk/safe2
- To respond to the consultation click here.
