Will Government ever clarify Energy Efficiency standards for landlords?

As 2025 gradually approaches, the question of how the private rented sector decarbonises and becomes more energy efficient is becoming more and more urgent. 

More than ever, landlords across the market are aware of the significant challenges which will need to be overcome if the Government’s ambitious targets are to be met.

At this stage it’s very difficult for landlords to take clear steps towards achieving decarbonising of their properties, or to make them more energy efficient, until the Government provides guidance on minimum energy efficiency standards. By setting a target people will know where to go, and how they can plan.

A big (and obvious) concern as regards this target is the expense. 

Two years on from the closure of the Government’s consultation on Minimum Energy Efficiency Standards (MEES) in the private rented sector, many landlords are worried that upgrading their properties will cost a great deal, especially if they manage and own a larger portfolio.

The costs of retrofitting their properties will be significant. So, with net zero the final goal, what will landlords need to do to get there? Without clarity from government, these individuals will be unable to determine what precisely needs to be done, as well as how much they need to budget for improvements. 

What is the cost of a heat pump and the associated retrofit for the property? Do I need external insulation? Does the current insulation meet future standards? Can I do the work to the property? Will the local authority allow me to do the works? Is there a workforce able to deliver it within the timescales that government have indicated? 

Each of these questions hang over landlords.

The NRLA believes the timescales consulted on by the Government’s are now unfeasible, and that a new timetable of action should be published, with staging posts to net zero to bring clarity and confidence to the sector.

It’s also important to note that cost-of-living pressures have had a huge impact on the delivery of such schemes. 

The cost of materials has increased dramatically (in some cases even doubling) while the price of labour has increased substantially. For landlords to meet their obligations, the Government should reintroduce the landlord energy saving allowance. It should also provide support in the transition via pre-approved planning and the development of a skilled workforce to deliver the required works. 

They should also look at developing one stop shops which give advice on the transition for all property owners.

Previous research conducted by thinktank Localis highlighted that in some local authorities the estimated costs of improving home energy can be around 50 per cent of property values. 

While properties elsewhere  may have higher value, the cost of works can still be prohibitive. By creating a price cap based on the local housing allowance, this will allow for retrofit and for grants to targeted at those properties which are hardest to reach. 

This will still be a challenge for many landlords as they will not have the equity in the property to make the changes.

Additionally, to assist landlords in meeting decarbonisation/energy efficiency, the Government should look at introducing Building Renovation Passports – a measure which the NRLA has campaigned for consistently over recent years.

This will allow landlords to know where the property is and the route that it must go in order to get to the final destination. This will allow landlords to know what they need to budget for and plan the changes to the property.

But overall, what the sector needs is more clarification and support from the Government when it comes to decarbonisation, energy efficiency and targets. 

With the drive to make homes warmer and have less of an impact on the planet, clarity on what that direction of travel is and the road map to how to achieve it is needed more than ever.

* Gavin Dick is Local Authority Policy Officer at the National Residential Landlords Association *

We're excited to announce that we're working on building a shiny new website for readers of Landlord Today! As part of this process, commenting on articles will be temporarily disabled. We look forward to sharing our new and improved Landlord Today website with you shortly!