Two thirds of private renters need much stronger energy efficiency standards if they are to enjoy warmer homes that are affordable to heat and free of damp and mould. That's what our latest research with the Generation Rent Renters' Panel finds.
Installing insulation and other improvements improves a property's value but landlords are leaving their tenants to put up with cold and draughty homes. Even the £5000 Green Homes Grant the government introduced in September has not nudged landlords into action.
As well as higher legal standards, tenants need incentives to demand improvements. Right now many don’t know if they will stay long enough to benefit from improvements and worry that their landlord would raise the rent if they made improvements. Tenancy reform is needed to give renters confidence to ask for improvements, and the ability to claim back rent if their landlord leaves them with an inefficient home.
Homes with low energy efficiency are not only more expensive to heat; they are also more vulnerable to condensation, damp and mould. The problem is worse in the private rented sector. Two thirds of private renters live in homes rated D or below, compared with 44% of social tenants. Despite paying substantially more in rent, private renters are more likely to live in cold homes or face damp problems. Our report explores the reasons for this disparity.
Landlords have an incentive to install energy efficiency improvements; raising a home from D to C increases its value by 5%. But as this value cannot be realised without selling or remortgaging, it is a fairly weak incentive.
The Government’s new Green Homes Grant should strengthen that incentive, but early signs indicate that landlords’ take-up of the scheme is limited. While they own 32% of homes rated D or below, just 14% of grant applications so far have come from landlords, less than half the rate we would expect to see. The question therefore remains, what are the obstacles to improving homes in the private rented sector?
New research, conducted through our Renters Panel, has indicated three major barriers to better insulated homes. Members of the Renters Panel completed the government’s Simple Energy Advice online tool and provided feedback to Generation Rent on their findings.
- First, panel members indicated that they were not confident they would benefit from any energy efficiency improvements to their homes. Some felt uncertain that they would be in the home long enough – either because it was unsuitable for them in the long run or they feared eviction by their landlord. Half (48%) were worried that any energy savings achieved would be cancelled out by an increase in their rent.
- A second obstacle to the improvement of these homes is the lack of knowledge private renters have about the energy efficiency measures already in place. While almost all panel members knew what type of glazing and boiler they had, only half knew what type of roof insulation they had and 44% the type of wall insulation. Combined with the unreliability of Energy Performance Certificates, which are valid for 10 years, this makes it difficult for private renters to make informed requests for improvements.
- The third obstacle in improving private rented homes is the lack of willingness from landlords to make improvement. Although most renters lack an incentive to make requests, too many of those who do simply get ignored. The significant obstacles to improve the energy efficiency of private rented homes is a huge problem for renters’ finances, physical and mental health and overall wellbeing. This issue has been made worse by the pandemic, as private renters have been, and continue to be, trapped inside of homes they are unable to improve.
We conclude that if the government is to succeed in making our homes greener, and life for renters more pleasant, it needs a bigger stick to persuade landlords to act, along with the carrot of grants and other finance. We therefore back the government’s proposal to raise the minimum energy efficiency rating to C.
But the government must also give renters their own incentives to demand improvements: the prospect of genuine savings by limiting rent increases, the security of being able to stay in their homes for long term that would come with effective tenancy reform, and an ability to claim back rent if their landlord fails to comply. The government must also use these new requirements to introduce a full national register of landlords and their properties to help tenants and enforcement authorities alike weed out bad landlords and raise standards.
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