Illegal rentals costing tenants £321m extra in energy bills

May 03, 2022 5:15 PM

A quarter of a million landlords are letting families live in homes that are so expensive to heat they are illegal to let out. We estimate tenants in properties across England to be spending £321 million more this year on energy bills than they would if their homes met basic standards.

South West England is the region where private renters are most likely to live in a home that fails Minimum Energy Efficiency Standards (MEES) – nine percent of households, compared with six percent in England as a whole.

Despite rules requiring landlords with properties rated F or G on their Energy Performance Certificate (EPC) to install insulation and efficient heating systems, just one in eight councils is enforcing them and protecting tenants from extortionate heating bills.

Ahead of Thursday's elections, Generation Rent is calling on councils to identify local private rented homes that fail these standards, and take action to bring them up to standard while giving tenants protection from eviction and a chance to claim back rent.

We have analysed EPC data to assess the scale of the problem in each region in England. A total of 201,000 homes recorded as private rented are classed as F on their EPCs and 62,000 are classed as G, out of a total of 4,265,000 with an EPC.

Recent research by JLL found that following the increase in the energy price cap, the average energy bill for a Band G property is now £4,950 per year and £3,587 for a Band F home. For a home at the legal minimum of Band E, the average bill is £2,687. Upgrading a Band F home to the legal minimum would therefore save the average tenant £900 per year and upgrading a Band G home is worth £2,263. Across all households affected, landlords’ failure to comply with the law is worth £321m per year – a staggering amount given the rising cost of living.

Private renters in London are least likely to be in an illegal home, with 3.3% failing standards, followed by the North East with 4.0%. The worst region is the South West where 9.1% are rated F or G; private renters in the West and East Midlands have a 7.5% chance of living in a home that fails minimum standards.

Since April 2020, under MEES, landlords are no longer allowed to let out a home with an EPC band of less than E, unless it has an exemption. Indeed since 1 July 2020, just 9,269 private rented properties had an exemption from MEES.

Local authorities are responsible for enforcing MEES. We made Freedom of Information requests to councils accounting for two thirds of England’s private renter population. Of the 101 councils that provided information about their MEES enforcement work in 2020-21, just 13 issued enforcement notices, a total of 359. Of those that did issue enforcement notices Barnsley Council issued the most, with 181, followed by Bristol with 35 and Thanet with 30.

Landlords failing MEES are only liable for a maximum fine of £5000, and their tenants are not protected from eviction if they complain or eligible to claim money back to compensate for higher bills. Often those that aren’t fined are not fined the maximum amount.

However, councils enforcing MEES can usually serve non-compliant landlords with improvement notices on the basis that the home is too cold to be considered safe. This protects tenants from a retaliatory eviction for six months and gives them the basis to claim back rent through a Rent Repayment Order if the landlord fails to make the necessary improvements.

As voters elect councillors on 5 May, we are calling on councils to commit to using publicly accessible data on EPCs to identify tenants in cold homes and all their enforcement powers, including improvement notices, to protect them.

A quarter of a million households are in homes too cold to be legal and with energy bills through the roof, they are paying hundreds, if not thousands, of pounds more than they should as a result. People will miss meals, get ill, and fall into arrears as a result of their landlord’s negligence.

Councils have the data and the powers they need to protect the most vulnerable tenants – but at the moment most are not using them. The government needs to act much faster to ensure that private landlords insulate their properties, including by reforming tenancies to give tenants more confidence to exercise their rights.

It is because of this cost of living crisis that we have started a petition with Emma, one of our supporters, who has seen how the cost of living has impacted her and her seven year old son's attempts to find a suitable home. Make sure to read Emma's story here and sign her petition.

With thanks to Generation Rent volunteer Jamal Langley for processing FOI responses. 

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