In a bid to lower the energy bills of those in rented homes while also reducing the UK’s carbon emissions, the UK government has set ambitious new energy efficiency targets.
Research carried out in Q3 2024 shows that 67% of landlords currently own at least one property that does not meet the government’s proposed new target level of an Energy Performance Certificate (EPC) of C or above. (Research conducted by Pegasus Insight on behalf of Foundation Home Loans.)
Sadly, BHESCo sees the results of inadequately insulated and heated buildings on a regular basis. People who are unable to afford to buy their own homes are living in cold, damp houses that lead to poor health outcomes, wasted heat and power, and unnecessary carbon emissions.
If you are a landlord, the high inflation experienced since 2022 may mean you are struggling to carry out the remedial actions necessary to bring your properties up to a decent standard.
This blog will explore the challenges you may face in reaching the new standards and look at what support is available to help you.
An overview of Labour’s plans
As presented in its Warm Homes Plan, the UK Government is consulting on its aim for all rental properties (privately rented and social housing) to reach an EPC rating of C or above by 2030. This is a significant step up from the current minimum requirement of an E rating for privately rented properties and no minimum requirement at all for social housing. Currently, many rental properties need significant upgrades to meet the new standards.
If landlords fail to comply with the new standards, they could face substantial fines and restrictions on renting out their properties.
Challenges faced by landlords
As a landlord, you may face several challenges when considering an upgrade to your properties:
- Financial constraints are often cited as a major hurdle and costs vary depending on the type and age of property being upgraded. However, in some cases, improvements can be quick, easy, and affordable. Topping up loft insulation, for example, will typically cost less than £1,500 and the price for installing eight of the cheapest, standard size PVC windows can be approximately £4,800 plus VAT.
- You may lack the technical expertise and time to implement the necessary changes.
- If you own older properties, which represent a sizeable percentage of the UK’s housing stock, you may face structural challenges that can make upgrades more difficult and expensive.
Heating and insulation grants
Fortunately, there are several support options available that provide help to improve your rental properties. Under its Warm Homes Plan, the government has pledged an initial £3.4 billion over the next 3 years to transform 350,000 properties and a total of £6.6 billion over the course of the current parliament.
Grants and low interest loans are available to support investment in insulation and other improvements such as solar panels, battery storage, and low-carbon heating to cut bills.
The grants will be rolled out via combined authorities, local, and devolved governments. Labour will also work with the private sector, including banks and building societies, to provide further private finance. Grants and subsidies that help cover the cost of energy-efficient upgrades currently include:
- A new Warm Homes: Local Grant to help low-income homeowners and private tenants with energy performance upgrades and cleaner heating. Low-income, private tenants will be eligible for support, with the agreement of their landlord.
- Warm Homes: Social Housing Fund, which replaces the Social Housing Decarbonisation Fund, to support social housing providers and tenants. This provides funding to local authorities, combined authorities, registered providers of social housing, and registered charities that own social housing in England to install energy efficiency upgrades and low-carbon heating measures to homes in England.
- Boiler Upgrade Scheme which opened for grant applications on 23rd May 2022 and will run up to March 2025
- Great British Insulation Scheme is run via the energy suppliers. A landlord or tenant can apply (provided they have the landlord’s permission).
- Energy Company Obligation (ECO) scheme. This places an obligation on medium to large energy companies to reduce the energy usage of low-income, fuel poor or vulnerable tenants by installing insulation or upgrading their heating system.
Help with the complexity
As a landlord facing the day-to-day challenges of running a property rental business it can seem overwhelming to be faced with a raft of potential grants, loans, and financing options.
Furthermore, as demand for energy efficiency improvements gathers pace, the variety of technical solutions available are increasing and improving all the time. These not only include new ways of providing energy and heat but also smart thermostats, energy-efficient lighting, and advanced insulation materials.
Dealing with these issues is BHESCo’s core business. We have extensive experience with all aspects of energy efficiency, including:
- Conducting an energy survey to assess how best to improve your property
- Consultancy on potential solutions, with costs and projected savings
- Help with accessing available grants
- A cost-effective finance plan or full project management of your upgrades (see the Commercial Section of our website Renewable energy and energy saving for commercial properties to find out more about how we can help)
Meeting the new government targets for warmer homes is a significant challenge but it is also a crucial step towards a more sustainable and energy-efficient housing market.
With the right support and resources, you can make the necessary upgrades to your properties, benefiting both yourself and your tenants. It is crucial for all stakeholders to work together to achieve these goals and create a better future for the rental market.
If you would like to partner with BHESCo to improve the EPCs of properties you manage, then please contact us using the form below:
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