Why Should Landlords Improve the Energy Performance of Their Properties?

18/06/2018

Why Should Landlords Improve the Energy Performance of Their Properties?

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In 2016, the UK’s housing stock generated approximately 17% of the country’s total annual greenhouse emissions, according to final estimates of UK greenhouse gas emissions, a 5% increase of emissions when compared to 2014. The UK has a legally binding target to reduce total carbon emissions by 34% by 2020. Taking this into account, one should find this residential carbon emission increase quite an odd one.

There are some barriers which need to be addressed, of course. The cost of energy is an issue increasingly gaining attention as more and more households struggle to meet rising energy costs and thus adequately warm their homes. According The Guardian, “more than 2.3m families live in fuel poverty in England” in 2016 (read full article here). In order to meet energy and climate targets, as well as tackle fuel poverty, the government has introduced some incentives for homeowners to improve the energy performances of their properties. One of those initiatives was the Green Deal, a policy designed to help business and home owners to employ more green technologies. The deal incentivated the installation of new green technology into a property with no upfront costs, with the payback was recovered through the energy bill over a period of time in the form of a loan. However, the deal was innovative and groundbreaking it its vision, we now know much more about buying behaviour and keys to customer decision making. The Green Deal has been re-launched looking for greater engagement.

The Green Deal was an innovative incentive to push the installation of renewable energy technology.

A study conducted in 2013 sought to know their attitudes and behaviours of private sector landlords towards the energy efficiency of tenanted homes and it reached a few key findings. One of them was that private landlords are less engaged in sustainability issues when compared to social landlords and homeowners. This is quite worrying, especially considering that the private sector has been increasing: for example, it increased 7% from 2013 to 2014, according to HomeLet. Another finding was that the Green Deal was not appealing to private landlords as they showed reservations taking loan finance to fund any property improvement (including those related with energy efficiency). All in all, energy efficiency is just something that landlords do not think about too much, they just want to rent. Another interesting fact was that landlords’ perception of sustainability was not linked to the number of properties they were leasing.

Well, from this year, a few things have changed and you, as a landlord, should be concerned about them! There are new incentives for homeowners, particularly landlords, to improve the energy efficiency of their tenanted houses. The Minimum Energy Efficiency Standards (MEES) were introduced in April 2018, making it illegal to grant a new lease, including existing tenants (after by 2020), on a domestic or commercial property with an Energy Performance Certificate (EPC) rating below E. EPC is a guide that new house owners and tenants receive when they look into a property. Simply put, if your current EPC rating is below E, you must make a plan to improve the energy efficiency of the property in order for you to grant a new lease on the property. According to Just Landlords, it is believed that one in ten residential properties currently have an EPC rating of F or G, so would not meet the new standards and a civil penalty of up to £4,000 will be imposed for breaches of the new MEES.

Taking this into account, the behaviour of private landlords towards energy efficiency is surely going to change. However, HomeLet’s Landlord Survey 2015 showed that most landlords (40% of respondents) consider property maintenance their most stressful activity. That is why SmartKlub is creating the perfect tool for them to find the easiest and quickest solutions to these problems. Running a survey ourselves, we want to revalidate your perception of energy efficiency improvements in your property through our pilot Easy Energy Engager. CLICK HERE to try it out and let us know your thoughts or any questions you may have.

40% of landlords consider property maintenance their most stressful activity (source: HomeLet’s Landlord Survey 2015)