This week the Government announced it is raising the spending limit that caps the liability of private sector landlords for the energy efficiency of their properties. We believe that this prod to the market is cold comfort and sends the wrong signal. By raising the cap to £3,500 rather than £5,000 the Government has chosen to help an additional 5,000 households rather than a further 40,000 households that are living in dangerously cold homes, by its own admission. This is not sending the market a message of urgency.
Instead, we need a clear signal that the Government is taking its Clean Growth Strategy targets seriously. We know the policy options and the scale of the challenge. To maximise the number of privately-rented homes attaining EPC C by 2030, we now need a much clearer trajectory.
We can build those trajectories. Show us at Parity Projects a property, and we’ll tell you the biggest impact on fuel bills that can be made for £3,500. Show us a community, city or county of properties and we’ll tell you which ones are likely to be dangerously cold (ie EPC F or G), and what can be cost-effectively achieved for each one. Or show us a portfolio or neighbourhood and we can tell you the most cost-effective way to get most homes up to EPC C over the next decade.
The challenge is daunting. And it will only grow in scale. But investment in energy saving measures benefits both residents and landlords.
If current trends hold steady, almost one in four homes will be in the private rental sector by the end of 2021, and a fair proportion of the growing market will be those homes deemed undesirable by other parts of the market and left to be picked up by arms-length landlords.
Regulation is necessary as a stick for some landlords, but there are carrots as well. Our analysis for UK Green Building Council and WWF in 2014 showed the investment required by the regulation benefits all involved:
- Occupants would save £400 a year on bills, or pay more in rent a healthier home
- E and F rated homes sell for 6% more than G rated homes
- For the average UK house, this means an uplift in value of £15,000 – a ten-fold return on the average initial investment.
- All at an average cost of £1,421
With these benefits, it’s wrong to focus on finance as the barrier. Is it wrong that a landlord is required to supply a home that is not dangerously cold under the Housing Health and Safety Rating System? Enforce the regulations, provide support to overcome the technical and practical barriers, and let the market do the rest – any other business has to respond to regulations and that should apply equally in the housing market.
We already work with many private landlords and housing associations that are looking ahead and working to the 2030 Clean Growth targets now. If you have a housing portfolio you want to start planning for now, please get in touch.