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Improving the energy performance of rental properties to Band C8 Feb 2021

Improving the energy performance of rental properties to Band C

The UK Government are being advised by The Climate Change Committee (CCC) about how they can achieve the net zero carbon emissions target by 2050.  It has recommended that all homes should have a minimum Energy Performance Certificate rating of C by 2028. They say that by improving the energy efficiency of UK homes, responsible for about 15 per cent of UK greenhouse gas emission, will be the key to enabling the government to achieve its target.

The Government’s Target

30 years of successfully reducing UK emissions while simultaneously growing the economy
A 500% increase in the amount of renewable capacity connected to the grid from 2009 to 2020
A 72% reduction in greenhouse gas emissions from electricity generation between 1990-2019

The strategic context for housing in the UK

Buildings are the second largest source of emissions in the UK
90% of homes in England currently use fossil fuels for heating, cooking and hot water
66% of homes of homes are at Energy Performance Certificate D or worse

The Government has stated that the energy performance of way too many existing homes is not good enough. Around 16 million homes in England, 66% of the total, are at Energy Performance Certificate D or worse. In the private rental sector, existing legislation requires that all buildings have a minimum standard of energy performance of Band E at the point of rental. The modelled annual energy cost of the average Band C rated home is around £750 less than the average Band E rated home, assuming both homes are being adequately heated.

2018 PRS energy efficiency

Homeowners: What is the Green Homes Grant?

The Green Homes Grant is a scheme whereby the Government provides a home-owner with a voucher for up to £5,000 in order to cover up to 2/3rds of the cost of energy efficiency and low carbon heat improvements to the home or rental property. It is possible to receive a larger grant if you are a homeowner and you or a member of your household receives one of the qualifying benefits, whereby the government will cover 100% of the cost of the improvements up to £10,000.

  • Attendance Allowance
  • Carer’s Allowance
  • Disability Living Allowance
  • Pension Guarantee Credit
  • Employment and Support Allowance (income-based or contribution-based)
  • Jobseeker’s Allowance (income-based or contribution-based)
  • Housing Benefit
  • Income Support
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment
  • Severe Disablement Allowance
  • Tax Credits (Child Tax Credit and Working Tax Credit)
  • Universal Credit

The Green Homes Grant Voucher and Local Authority Delivery schemes, together worth £2 billion, was launched in September 2020 and the Prime Minister’s Ten Point Plan (see below) confirmed that the schemes would be extended for another year.

The target is to lift the minimum EPC for all privately rented homes to Band C – this would apply to new tenancies from 2025 and all existing tenancies from 2028. The government has outlined penalties of up to £30,000 for landlords who do not comply, and is considering banning agents and portals from listing properties that do not meet the standards.

The proposals also recommend increasing the “landlords cap” – the maximum amount of money a landlord must invest to improve a property’s energy efficient rating – from £3,500 to £10,000.

UK housing stock is generally older than in the rest of Europe, according to the consultation document, and “the potential for improvement in the energy performance is considerable”. The privately rental sector properties, which make up 20% of the UK housing stock, are among the least energy efficient, “costing over £6 billion in energy bills (2018) and producing greenhouse gas (GHG) emissions of around 11 megatonnes of carbon dioxide equivalent a year”.

What to do about the looming legislation

 

So what can homeowners and landlords do in order to ensure that they have these energy improvements carried out in time for any legislation

coming into place, whether that be 2025, 2028 or 2030, it is not advisable to leave this work to the last minute.  Having seen the panic amongst landlords over the EICR(electrical installation condition report) requirement under the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, when leaving the works to the final hour and being unable to find qualified tradesmen to carry out the works, or discover the cost of upgrade is prohibitive and face hefty fines.  With a proposed penalty of up to £30,000 faced for non-compliance of the new EPC legislation, it is very wise to budget and plan your property upgrades over a 5 year period.

Energy Saving Ideas:

  • Upgrade your lighting to LED light bulbs: Of course if you are not living in the property, you cannot insist that your tenant uses these bulbs, but in order to improve your property rating it may be advisable to leave a selection of bulbs in the property as part of the inventory.
  • Insulate your walls and roof: Apply for a Green Home Grant for solid wall insulation (internal or external), cavity wall insulation, under-floor insulation (solid floor, suspended floor), loft insulation, flat roof insulation, pitched roof insulation, room in roof insulation
  • Upgrade the windows and doors: There is no point investing in the latest heating and insulation technologies if you neglect the property’s windows so consider upgrades to draught proofing, double or triple glazing (where replacing single glazing), secondary glazing (in addition to single glazing), energy efficient replacement doors (replacing single glazed or solid doors installed before 2002)
  • Boiler upgrade:  Moving to a more energy efficient boiler is a great way of making a home more energy efficient as well as lowering energy bills, which will both have significant appeal to tenants.  You can also consider the following improvements (all of which are covered under the Green Homes Grant) – Upgrade the hot water tank thermostat, ensure that your hot water tank is insulated, upgrade heating controls (such as, appliance thermostats, smart heating controls, zone controls, intelligent delayed start thermostat, thermostatic radiator valves)
  • Smart meters: Smart meters are replacing traditional gas and electricity meters in homes and small businesses across Great Britain as part of an essential infrastructure upgrade to make the energy system more efficient and flexible, helping to deliver net zero emissions cost-effectively.  They are also modernising energy services by ending manual meter readings, delivering accurate bills and enabling prepayment customers to conveniently track their usage and top-up credit without leaving home. The In-Home Display (IHD), which households are offered when they have smart meters installed, gives accurate information about energy consumption and costs so consumers can easily understand how to save money on their bills.
  • Heat-pumps: These are very efficient electrically-driven devices that extract heat from the air, ground or water and concentrate it to a higher temperature and deliver it elsewhere, for example to a central heating system. It can replace fossil fuel heating, such as a gas or oil boiler.

The Government’s 10 Point Plan for the Green Industrial revolution

On the 18 Nov 2020 the prime minister Boris Johnson announced his “10 Point Plan” for his “Green Industrial Revolution” claiming that it will bring 250,000 new jobs into the economy.  Here is the plan:

1. Green public transport, cycling and walking

Acceleration of the transition to a more active and sustainable transport system in the UK with investment in rail and bus services, and in measures to help pedestrians and cyclists. The government pledges to fund thousands of zero-emission buses and cycle lanes in towns and cities.

2. Hydrogen

The UK is aiming for 5GW of low-carbon hydrogen production capacity by 2030 and they are pioneering hydrogen heating trials, starting with a “Hydrogen Neighbourhood” and scaling up to a “Hydrogen Town” by 2030.

3. Nuclear power

Although controversial to some, the Government states that nuclear power is safe and provides a reliable source of low-carbon electricity. They are looking to the future of nuclear power in the UK through further investment in Small Modular Reactors and Advanced Modular Reactors. In conjunctions with EDF Energy the nuclear power station Hinkley Point C is set to provide reliable energy at an affordable cost, powering nearly six million homes for around 60 years and creating more than 25,000 jobs.

4. Offshore wind

By 2030 the plan is to quadruple offshore wind capacity in order to generate more power than all UK homes use today, making the most new technology and investing in bringing new jobs and growth to ports and coastal regions across the Country.

5. Jet zero and green ships

The Government has committed to “positioning the UK at the forefront of aviation and maritime technology to push forward low carbon travel”. By taking immediate steps to drive the uptake of sustainable aviation fuels, investments in R&D to develop zero-emission aircraft and developing the infrastructure of the future at our airports and seaports, they aim to make the UK the home of green ships and planes.

6. Greener buildings

There are 7 components of a Green Building which are:

  • Energy Efficiency and Renewable Energy
  • Water Efficiency
  • Environmentally Preferable Building Materials and Specifications
  • Waste Reduction
  • Toxics Reduction
  • Indoor Air Quality
  • Smart Growth and Sustainable Development.

By making UK buildings more energy efficient and moving away from fossil fuel boilers the Government believes that homes will be warmer and more comfortable, with much lower fuel bills. The plan is to set a clear path to see a move away from fossil fuel boilers over the next fifteen years and to replace appliances with lower carbon, more efficient alternatives, supporting 50,000 jobs.

7. Carbon capture, usage and storage (CCUS)

The Government’s ambition is to capture 10 million tons of carbon dioxide a year by 2030 – the equivalent of 4 million cars’ worth of annual emissions. They pledge to invest £1 billion supporting the establishment of Carbon Capture Usage & Storage in 4 industrial clusters, creating ‘SuperPlaces’ in areas such as the North East, the Humber, North West, Scotland and Wales.

8. Protecting the natural environment

In order to safeguard the UK’s cherished landscapes, restore habitats for wildlife in order to combat biodiversity loss and adapt to climatechange,using the following themes:

  • providing green infrastructure
  • sustainable construction and design
  • managing the risk of flooding
  • managing surface water
  • using water wisely
  • land affected by contamination
  • preventing pollution
  • managing waste
  • woodlands and trees
  • protected sites, biodiversity and geodiversity
  • protected species, wildlife management and licensing
  • agricultural land and sustainably managing soil
  • access, recreation and leisure
  • landscape character

9. Zero emission vehicles

From 2030 the sale of new petrol and diesel cars and vans will end, 10 years earlier than planned.  A £2.8 billion package of measures will be provided in order to support industry and consumers to make the switch to cleaner vehicles.

10. Green finance and innovation

The Government has committed to raising a total Research & Development investment of 2.4% of GDP by 2027 and in July 2020 they published the “UK Research and Development Roadmap”:

  • Building on existing and emerging strengths, irrespective of scale, to maximise the benefit from public investment
  • To go further and faster in supporting areas with untapped potential for future growth
  • To provide tailored support for less R&D-intensive regions to develop new capability and absorb new technology and innovations
  • To support increased collaboration between local, regional and devolved institutions on science, research and innovation, and ensure a strong role for local civic and business leaders in defining and delivering on local opportunities
  • To ensure that R&D interventions are aligned with wider improvements made in support of levelling up areas across the U.
  • To simplify their systems and reduce red tape to lower the barriers to participation so that places which currently secure less research funding can now make a greater contribution to UK R&D reaping the benefits for their local economies.

 

I work all over the UK with various business owners, dedicating my creative and expert property knowledge from 35 years in the industry. I am a Level 4 ARLA Propertymark examiner, I sit on the board of Agents Giving Charity and I love everything property related! I can be contacted on 01923 627777 or by email to jane@jpgardner.com.

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