Landlords to pay up to £15k a property to meet new Government energy targets
Ambitious energy efficiency plans to raise minimum energy efficiency ratings in the private rented sector to a minimum C have been unveiled by the Government.
Under plans released earlier this month landlords with properties which fall below a C rating on their Energy Performance Certificate (EPC) have been told they will need to pay up to £15,000 for improvement works or will be forced to take their homes off the rental market.
Under proposals landlords will have until 2030 - just five years away – to comply, this is despite the fact an estimated 5,000 properties a day would need to be retrofitted to comply with the new targets.
Landlords whose properties are currently rated D-G will be expected to start by making 'fabric improvements' such as installing double glazing and cavity wall and loft insulation; moving on to solar panels and batteries if their properties still fail to make the grade.
The government has capped the spend at £15,000, although it may reduce this to £10,000 in areas where rents are lower, or for properties in lower tax bands.
While £15,000 is the ceiling, the government has estimated the average cost to landlords to be between £6,100 and £6,800 per property.
We all want homes that are as efficient as possible – but we at the NRLA do have some concerns over the plans – namely how these improvements will be funded, and questions over whether it is possible to make improvements to the estimated 2.5 million homes falling below a C in the timescales suggested.
With this in mind we are calling for Government to provide a comprehensive funding package to back these plans and properly investigate whether proposed deadline is achievable.
Landlords are not the fat cats the media would make us out to be, with, at the last count, 70% basic rate taxpayers, meaning funding these sorts of improvements will be out of reach for some.
And it’s not just us calling for support, with the Committee on Fuel Poverty and Citizens Advice both agreeing support is needed to help landlords.
Even with funding in place there is still the issue of finding qualified tradespeople to do the work in a tight time period.
Recent data shows the UK is already facing a shortage of 166,000 skilled tradespeople, a figure that is set to grow to 250,000 by 2030.
This makes finding the right company challenging at the best of times, let alone when you are competing with hundreds of thousands of other landlords to get work done in full and on time.
How many homes need improvement - and why?
According to the English Housing Survey, between 2013 and 2023 the proportion of private rented sector homes with an Energy Performance Rating of A-C increased from 23% to 48.%.
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 homes in the private rented sector – around a third – being built pre-1919, making them some of the hardest to improve.
What about the recent consultation on changes to EPCs?
Last week’s announcement follows an earlier consultation, which is closing at the end of this month proposing to change the way EPCs themselves are calculated.
This means that even properties currently rated C or above may still need additional work, should any changes affect their overall rating.
The good news is that homes that are now rated A-C will at least have extra time to carry out any improvement works; continuing to be considered compliant until their current EPC runs out. How long this would be, however, is still up in the air, with the consultation also looking at the length of validity periods.
What happens next?
The Government has already announced a funding package, the ‘Warm Homes: Local Grant’ scheme, that will be available in selected local authority areas from this April to support tenants on low incomes, with other funding available, subject to conditions.
However more is needed.
In its response to the consultation the NRLA will be asking for a comprehensive funding package to be made available across the board to help landlords meet the new standards, and for the Government to give serious thought as to whether its plans are achievable within the five-year timeframe.
More information
- You can access the Government’s consultation document here.
- For more information on the NRLA’s 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. For more information visit nrla.org.uk/training
- 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
