The UK Government has recently scrapped (October 2023) proposals for changes to Energy Efficiency standards previously due to be introduced in 2028. This was announced in a review of green policies and means the scrapping of proposals to force all Landlords to adopt a minimum standard of energy efficiency for rental properties.
Originally, the proposals would have meant all tenanted properties must have an EPC rating of at least C by 2028. This would include all existing and new tenanted properties.
Current rules, in place from 2018 state that all rented properties, including HMOs with rooms to let, must have an EPC rating of E or higher.
Of course, with the proposals previously expected to be implemented, many Landlords have already improved their own properties and rental stock whereas some have taken the decision to offload properties due to additional costs of implementing these changes.
These increased costs are in addition to other well documented cost increases due to higher energy bills, (mainly affecting those Landlords with rooms to rent where bills are included in the rent), mortgage interest rate rises, changes to the Tax requirements over recent years and further legislation and regulation including the possible banning of no-fault evictions, albeit that this has been postponed in the watered-down Renters Reform Bill.
Should Energy Efficiency Still Be Improved?
Although now not a requirement to have an EPC rating of C or higher for rental properties, the UK Prime Minister, Rishi Sunak has encouraged Landlords and home owners alike to do so where they can.
Of course, improving the energy efficiency of a home or rented property, while having an upfront cost, does have great benefits and would go towards reducing costs in the future by way of reducing energy bills whilst also helping to combat climate change.
Some upfront costs could be passed on to tenants to some extent, by way of rent increases although these should be limited to the market rate. However, there should be some payback in the medium to longer term with many of the home improvements made.
Some Landlords may see the governments’ change of direction as a way to avoid a further cost outlay and decide against such improvements. However, there is a case to say, if landlords want to remain competitive, it is worthwhile improving the energy efficiency of their rented properties which can appeal to tenants due to reduced energy bills. That said, with a serious shortage of rental stock currently on the market, and a great deal of competition for any available properties and rooms there is little risk of remaining competitive regardless of improvements such as these although any improvement can mean a higher rent can be achieved.
Some improvements can be low in cost but have a great benefit in terms of reducing energy consumption, such as replacing bulbs to the LED variety or reducing drafts simply by using draft excluders or adding seals around doors and windows.
Improving Energy Efficiency - EPC
While an EPC rating of greater than E won’t currently be required going forward, there is always the chance that this will change. This could happen with a change of government or different outlook on the economy as a whole. There is likely to be further pressure in the near future on attempts to achieve net zero with a worsening climate crisis.
Costs may well reduce now, as there is less pressure to improve the efficiency of a property. However, if laws and rules change in the foreseeable future, costs are also likely to increase. Therefore, it may well be prudent to make the investment now and utilise the benefits of certain grants which are currently available, such as those for air source heat pumps.
Tips To Improve Energy Efficiency
So how do you go about improving the energy efficiency of a property? Here are some measures Landlords and home owners can take to enhance energy efficiency:
1. Energy Performance Certificate (EPC):
Ensure that your property has an up-to-date EPC. This document provides information about a property's energy use and recommends improvements. It is a legal requirement for landlords in the UK in any event.
2. Energy-Efficient Appliances:
Install energy-efficient appliances, such as A-rated boilers, LED lighting, and smart thermostats. These can reduce energy consumption and lower utility bills.
3. Insulation:
Proper insulation in the loft, walls, and floors can significantly improve energy efficiency. Consider adding cavity wall insulation, loft insulation, and draft-proofing windows and doors.
4. Double Glazing:
If the property has single-glazed windows, consider upgrading to double or triple glazing. Double-glazed windows provide better insulation, reducing heat loss and energy consumption.
5. Heating Controls:
Install programmable thermostats and individual radiator controls to allow tenants to manage heating more efficiently. Use zones across different floors of a property so you can control temperatures depending on requirements. This helps to avoid unnecessary energy usage when the property (or certain areas of it) is unoccupied.
6. Renewable Energy Sources:
Consider incorporating renewable energy sources, such as solar panels or heat pumps, to generate clean energy and reduce dependency on traditional energy sources.
7. Smart Home Technology:
Implement smart home technology, including smart thermostats, smart lighting, and energy monitoring systems. These technologies enable better control and optimisation of energy usage.
8. Regular Maintenance:
Ensure that heating systems, boilers, and other appliances are regularly serviced and maintained. Well-maintained systems operate more efficiently.
9. Educate Tenants:
Provide tenants with information on energy-efficient practices, such as using energy-efficient appliances, turning off lights and appliances when not in use, and reporting any maintenance issues promptly. This is of benefit to the Landlord in a shared house with rooms to rent as it can directly affect the costs to the Landlord.
10. Water Efficiency:
Install water-saving devices, such as dual-flush toilets, to reduce water consumption. Again, this can be more beneficial to a Landlord of a shared property where bills are included in the rent.
11. Green Energy Tariffs:
Consider switching to a green energy tariff for the property. This ensures that the energy consumed is sourced from renewable sources, contributing to a lower carbon footprint.
12. Government Grants and Incentives:
Check for available government grants or incentives for energy-efficient improvements. There may be financial support for implementing certain measures. Currently, at November 2023, the government are offering grants of £7500.00 towards Air Source Heat Pump installations.
By taking these steps, landlords can contribute to energy efficiency in their rented properties, create more sustainable living spaces, and potentially attract environmentally conscious tenants. Additionally, improving energy efficiency can enhance the property's EPC rating, making it more appealing in the rental market and allay any risks should laws change in the foreseeable future. Finally, for landlords with shared houses and HMOs or home owners renting rooms in there own homes, these changes can have a positive impact on there own costs by way of reduced bills.
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