Just before Christmas, as the weather got colder and government released its latest update on the fuel poverty statistics, there was still no news for private renters who need clarity about the detail of minimum energy efficiency standards in the PRS.
The statistics showed that one in five private rented households are officially fuel poor, and that the average ‘fuel poverty gap’ – the amount of money needed for a household to escape fuel poverty – is highest for private renters.
Despite these worrying trends, there is, in theory at least, some light at the end of the tunnel – but delays in implementing the policy need to be quickly remedied for that to be realised.
Since the 2011 Energy Act, we have had primary legislation that allows for minimum energy efficiency standards in the private rented sector, with it being widely recognised that energy efficiency is the major way to tackle fuel poverty.
Subsequent legislation has meant that since April 2016, renters have had the right to request energy efficiency improvements up to a certain level, that cannot be ‘reasonably’ refused.
More effective though, is the secondary legislation stating that from April 2018, new homes being rented out must have an Energy Performance Certificate of level ‘E’ – ending private rents on the coldest ‘F’ and ‘G’ properties, with exemptions in certain circumstances.
Naturally, though, the devil is in the detail – and that detail has still not been confirmed. The original policy envisaged financing improvements on those coldest properties through the Green Deal, which would make improvements at no upfront cost to the landlord, then paid for through savings on the tenants’ bill.
With the funding for Green Deal ending last year, the policy has been left as one with simply ‘no upfront costs’ for landlords making improvements, and therefore no way of making these improvements happen.
An alternative policy that emerged under the last Minister and which Generation Rent supported, was a cap of £5,000 up to which landlords themselves would have to make improvements to get them as close to EPC E as possible.
In fact, ongoing research has shown that this level of cap would be sufficient for funding improvements in most of the coldest PRS homes, and would be a strong start in properly tackling fuel poverty across the sector.
However, all of this needs to be consulted on and worked through, both ahead of the regulations going live in April 2018, but more urgently, before Autumn 2017, when landlords will be able to register themselves exempt (on various grounds, including potentially that they have spent up to the cap).
At this stage, we are still waiting to hear definitive noises from the Department for Business, Energy, and Industrial Policy that they will take forward the cost cap, despite cross-sector support for it in principle, including from landlords’ groups.
As we head into more cold winter months, it’s time that we finalise how we fund the minimum regulations, and also properly discuss how they will be enforced, in the ongoing context of reduced local authority budgets.
This debate can quickly get technical but the solution should be simple and based on policy already under consideration. Put simply, ensure that landlords who are making money from the coldest homes improve their properties and protect their tenants, in a way that is affordable and proportionate.