"Consideration needs to be given to the fact that most landlords are facing significant cost pressures. We believe that when it comes to energy efficiency, the government needs to offer some carrots alongside some sticks to landlords"
The UK’s rental housing stock is in desperate need of improvements to its energy efficiency. For this reason, Skipton Building Society is calling on the Government and landlords to play their part to tackle this huge societal challenge and accelerate the greening of UK homes.
Charlotte Harrison, CEO of Home Financing at Skipton Building Society, said: “Delays are bad for everyone. Letting the timetable slip will mean tenants will continue missing out on the opportunities to save money on their energy bills, the retrofitting and home improvement industries will not have the capacity to help landlords carry out all the work needed to meet the targets, and the UK misses the opportunity to reduce its carbon footprint.
“We also need more awareness from landlords on the energy efficiency improvements that their properties need to help reduce bills and support the decarbonising of homes in the private rental market that will address the cost-of-living, energy, and climate crises in the UK.
“Consideration needs to be given to the fact that most landlords are facing significant cost pressures. We believe that when it comes to energy efficiency, the government needs to offer some carrots alongside some sticks to landlords.
“This could include making energy improvement costs tax deductible or taking it a step further by offering government grants or matching energy improvement spending £1 for £1 for example. Generally, there have been far more incentives for homeowners and social tenants to make their homes green than there have been for landlords.
“If the government are to impose tighter energy efficiency standards on landlords, then we believe that there needs to be a significant notice period. Furthermore, the rules around the cost cap need to be clear and the cap needs to be set at a price which helps drive energy improvements, whilst not squeezing landlords out.”
The society recently surveyed its buy-to-let customers to find out what awareness they had of EPC ratings and found that 49% of all landlords surveyed admitted to not being aware of the buy-to-let legislation concerning EPCs and property efficiency and a third not fully aware of their but-to-let property or properties current EPC ratings.
Additionally, 46% of landlords were found to be planning on using their personal savings to pay for the home improvements in their buy-to-let properties and 39% may consider selling their buy-to-let property or properties as a result of the proposed legislation.
If landlords could improve the EPC ratings of their homes in line with the timetable originally proposed by the Government, it would also have a significant impact on the cost of living for tenants across the UK.
Recent research from Hamptons (part of the Skipton Group) found that tenants spend an average of 57% of their post-tax income on rent and household utility bills. This is made up by 45% on rent and 12% on bills. Overall, this figure has risen from 39% in 2018.
The average tenant moving from a home rated D up to one rated C will save an average of £302 per year on their gas, electricity and water bill at current prices.
If all privately rented homes with an existing EPC rating of D-G were upgraded to at least a C, it would save tenants in England £895m in utility bills each year, or £420 per household.
Charlotte concludes: “Skipton is committed to playing its part and is re-investing its profits into helping make Britain’s homes greener and is offering support and the tools to help landlords efficiently improve their rental properties.
"However, to help us tackle this huge societal issue and ensure we’re not as a nation delaying further the greening of UK homes, we urge the Government to stick to its timetable to upgrade minimum energy standards for rental properties and to better supports landlords through this process. “
