Buy-to-let landlords with older homes will be forced to install insulation and double-glazing or face a ban from taking tenants
Consultation looking to improve energy efficiency in rented homes
One in ten fall into lowest F or G efficiency category
Those who live in these low band homes pay far higher energy bills
Landlords who rent out properties built in the Victorian era and early part of the twentieth century may be forced to make upgrades to make them more energy efficient, under government proposals.
Ministers are consulting on a change that would mean owners of properties which fall under the lowest energy efficiency categories would be forced to make upgrades from 2018.
All eligible properties will have to be improved to a minimum energy efficiency standard before being let to tenants within four years, except where certain exemptions apply. The homes hit are those which have the lowest F or G rating in the Energy Performance Certificate efficiency scale.
In addition, by April 2016 tenants would be given the right to request consent to carry out energy efficiency measures, with landlords only able to refuse ‘unreasonable’.
The older the property, the worse efficiency is likely to be. The Department for Energy and Climate Change says 65 per cent of F and G EPC rated private rentals were built pre-1919.
To ensure there are not upfront costs, landlords will not be obliged to make improvements unless there is a grant available under the Green Deal finance initiative, Energy Company Obligation or other government funding scheme.
A new Green Deal Home Improvement Fund was launched last Wednesday. Within a day, 80 per cent of the fund had been allocated, with a chunk of this cash issued to landlords eager to make improvements.
Homeowners could have claimed up to £4,000 towards the cost of solid wall insulation or up to £1,600 for other energy saving measures, such as double-glazing, draft-proof doors and new boiler.
The consultation comes as data shows one in ten privately rented homes currently fall into the lowest energy efficiency categories.
The Department for Energy and Climate Change told This is Money that many properties which are either F or G rated could be boosted by making just one change.
For example, 40 per cent of privately rented properties could be improved above an F or G category just by installing loft insulation.
A spokesman said: ‘Properties with the lowest energy efficiency rating tend to be older properties that are electrically heated, off the gas grid, and lacking insulation.’
DECC estimates households privately renting a G rated home would need to spend, on average, £1,200 more on energy to heat their it properly compared to a typical property – those in F properties spend £700 more.
Private rentals have a higher proportion of homes which fall into the lowest EPC category rating – with eight per cent F category and three per cent G – compared to owner-occupied properties.
Recent research by AXA Business Insurance found the improvements most sought after by tenants were enhanced energy efficiency, through tools such as insulation, newer boilers or double-glazing.
Its survey also showed that many tenants were unaware how much their energy bills are being pushed up as a result of poor efficiency.
Only 19 per cent said they have seen the property’s energy efficiency certificate. Landlords are legally required to provide this certificate to tenants or run risk of fines.
According to the Council of Mortgage Lenders there are now 1.57million landlords – an increase of 120,000 in 12 months. Some of these may be ‘accidental landlords’ who don’t have vast experience letting to tenants or knowledge about energy efficiency.
According to DECC, the average energy efficiency of privately rented homes has risen over the past 15 years in line with other types of housing stock, but those without adequate insulation continue to lag behind.
In 2011, 34 per cent of rented properties with cavity walls did not have insulation in England compared with 30 per cent in the owner-occupier sector.
Furthermore, eight per cent of rented homes had no loft insulation compared with around four per cent in the owner-occupier sector.
Rented homes also have a significantly disproportionate share of all fuel poor households, at 33 per cent, despite accounting for around 18 per cent of all households. In 2011, around 782,000 privately rented households were in fuel poverty.
Privately rented homes are also more likely to be classified as a category 1 ‘excess cold’ hazard under the Housing Health and Safety Rating System.
This is a major cause of ill health for occupants, with 9.1 per cent falling into this category, compared to six per cent of owner-occupied homes.
In the consultation paper, the Government said: ‘Improving the energy efficiency of needlessly cold and draughty homes in the private rented sector will enhance the quality of living and cut the energy bills for the millions of people who rent their homes.
‘A range of cost effective measures now available can stop energy waste and make homes warmer, healthier and help control energy bills too. We are determined to ensure that these improvements are taken up, especially in the privately rented homes with the worst energy efficiency performance.’