With a year to go until regulations come into effect outlining minimum standards for energy efficiency in rented homes, new research from E.ON reveals landlords’ lack of awareness and worries about getting their properties to make the grade.
The research found one in four landlords (25%) don’t know about the requirements of the new Minimum Energy Efficiency Standards (MEES) regulations which will prevent them renewing existing tenancies or agreeing new lets if it doesn’t meet minimum standards. A further 42% admit to being ‘only vaguely aware’.
A quarter say that they don’t even know the Energy Performance Certificate (EPC) rating of their property to begin with (27%). Almost half of landlords don’t know the penalty for breaching the regulations (49%), with a third underestimating the penalty (31%). With a potential penalty of 20% of the rateable value for properties breaching the regulations after three months, this lack of awareness could cost them dear.
Mike Feely, Energy Efficiency Expert at E.ON, says:
“Government housing data already shows that the private rented sector has the highest proportion of properties falling in the F and G bands3, so it’s vital landlords look into what they need to do before the regulations come into effect.
“Whether landlords have in the past been put off by the perceived hassle, expense, or their own lack of knowledge around the subject, the clock is definitely ticking on the need to improve properties. We know this can be a huge challenge for landlords so we’ve developed a range of services to give them the support they need, from online account management that allows landlords to better control their property portfolios through to a range of great value insulation and heating services to make rented properties more energy efficient.
“For landlords worried about the potential cost of upgrading properties, financial support may also be available through the Energy Company Obligation if tenants meet certain qualifying criteria, with funding potentially available from major energy companies such as E.ON for insulation and new heating measures.”
Even landlords with some awareness of the new requirements have their concerns. A quarter say they feel worried about the cost of making their property compliant (28%), while one in five say they don’t know enough about the implications of the new rules for their property (19%).
A quarter believe the new regulations are yet another burden on the landlord (25%). In fact, 14% of landlords surveyed felt that energy efficiency should be solely the tenants’ responsibility.
When it comes to cost, landlords predict they’ll need to spend an average of £1,222 per property on energy efficiency over the next five years. To cover the cost of making the improvements to their properties, 42% of landlords would consider raising the rent to cover energy efficient upgrades.
While the majority say this is because the tenants are the ones to see the benefit in terms of lower bills, a third feel they just couldn’t afford not to (32%). Of those who wouldn’t raise the rent, more than half say this is because they worry their tenants would leave if they raised it because of energy efficiency upgrades (53%).
When it comes to improving the energy efficiency of their properties, a concerning 49% of landlords say they don’t feel adequately informed about how to do so. Not only does this mean they may struggle to get their property compliant with the minimum EPC rating regulations, but they also might miss out on other benefits for making a property more energy efficient.
Some 39% of landlords think being seen to have an energy efficient property will increase its value, while the same proportion think it makes it easier to convince prospective tenants to let the property.
Mike Feely from E.ON has provided a number of tips for landlords looking to improve their properties’ EPC ratings:
- Don’t underestimate the importance of insulation in making a property more energy efficient. If the property was built before or around 1920, it most likely has solid walls. Solid wall insulation can be installed from either the inside or the outside. If the property was built after 1920 it’s likely to have cavity walls. These have a double external wall with a small gap between which can be filled with insulation.
- Make a play of your energy savings standards – don’t just think of improving energy efficiency as something for meeting regulations, it’s a commercial decision too. Given most tenants are responsible for paying energy bills, some may be willing to pay more for properties that are energy efficient, so make sure you’re making the most of this as a selling point.
- Without properly insulated windows, the property could be losing up to 10% of its heat. Double glazed windows make a big difference when it comes to lowering energy bills as well as reducing condensation and noise. Instead of double glazing you could install secondary glazing which involves fitting a pane of plastic or glass inside the existing window recess to create an insulating layer of air. Though not as effective as double glazing, secondary glazing still saves a significant amount of energy and allows you to maintain good kerb appeal by keeping original features such as sash windows.
- EPC ratings look only at permanent improvements to the fabric of the building so think about long-term upgrades that will help to reduce heat and energy use. Simple things – sausage dog draught excluders and the like – will help keep heat in, but for the EPC you need to find permanent ways to fill the gaps to stop heat escaping through windows, doors, letterboxes and even keyholes.
- For those looking to bring their properties completely up to date, consider renewable technologies such as solar panels with an at-home battery to store electricity for use even when the sun goes down. Be aware these will contribute to your rating only if they’re helping to heat the house, rather than providing electricity for other uses.