Our response to the consultation on improving the energy performance of privately rented homes

Yes. We agree with the UK Government’s proposal to use the new energy performance certificate (EPC) metrics following EPC reform as the basis for the standards for the private rented sector. We would also stress the need for the UK Government to progress the new EPC framework as soon as possible to ensure there are no delays to implementing the new standards and provide clarity to landlords around what will be expected of them.

Yes, we agree with the preferred approach to require landlords to meet the fabric energy performance metric in the first instance, before focusing on the secondary metrics. Focusing on fabric performance is the best way to reduce household energy demand and bills, key to tackling fuel poverty. This is particularly important in the private rented sector, given that almost a quarter (24.1%) of private renters are in fuel poverty, which is higher than any other tenure type.

However, we do not agree that landlords should be able to choose between the smart readiness metric and heating system metric. Instead, we recommend that the heating system metric should be defined as the secondary target, provided the metric is developed on a carbon basis rather than simply on efficiency. This will be necessary to ensure that decarbonisation is supported in rented properties where significant fabric upgrades are inappropriate.

Landlords will need support to understand what is required of them as the new standards come into place. We are urging the UK Government to set up a national retrofit advice service in England. This will ensure that private landlords can receive impartial, tailored advice and guidance on how to take forward the measures needed to meet the standard as well as how to go further than the minimum standard.  

For landlords to meet the standards and to encourage decarbonisation of the private rented sector, there will need to be a focus on overcoming the upfront cost barrier of installing energy efficiency measures and low carbon heating systems, such as heat pumps, as part of the upcoming Warm Homes Plan. This should include attractive green finance offers, such as low cost UK Government backed loans. A national retrofit advice service would also signpost landlords to relevant financial support after receiving impartial, tailored advice, simplifying the process and giving them the confidence to invest in the right measures for their property.

We do not support Alternative 1 as we are concerned that this would allow landlords to install low carbon heating systems before fabric measures are put in place. Fabric measures are a no regrets option that will permanently lower energy bills for tenants, whereas low carbon heating systems may drive bill increases due to the current high cost of electricity.

We do not support Alternative 2 as it could allow landlords to install a series of low cost measures across all metrics that only result in very small bill reductions for tenants.

As outlined in our response to question 2, we would recommend a two metric approach. We agree with the UK Government’s proposal to require landlords to meet a primary standard under the fabric metric in the first instance.

However, we recommend that only the heating system metric is available to meet a secondary standard, rather than landlords having a choice between the heating system metric and the smart readiness metric.

We agree with the UK Government’s proposal to increase the cost cap to £15,000 per property. We would also recommend that measures that are funded via grants provided to tenants in fuel poverty are not included within the cost cap. For example, if a tenant was eligible for the Energy Company Obligation (ECO), then the landlord should not be able to include any ECO funding within their contribution to the cost cap and would still be required to spend up to £15,000 on meeting the standard.

This would maximise the improvements being installed in the private rented sector and support the policy’s stated aim of fuel poverty alleviation. It is also important that grant funding based on tenant characteristics, such as being in fuel poverty or on a low income, is not a substitute for private investment from landlords. To ensure the continued effectiveness of the new standards, we would also recommend that the cost cap increases in line with inflation.  

We disagree with the UK Government’s proposal to extend the exemption period for the cost cap from 5 years to 10 years. The UK will need to switch to low carbon heating at pace, with the Climate Change Committee estimating that the percentage of homes with low carbon heating will need to increase from 9% to 39% in the next decade. There is a risk that long exemption periods for the PRS would undermine this ambition or risk leaving the PRS behind in the low carbon heat transition.

We agree with the timelines proposed within the consultation. We would stress, however, that the dates proposed are the latest that the standards should come into force and should not be subject to delay. Given the policy’s dependence on the new EPC framework, this should be taken forward as soon as possible. There also needs to be clarity and certainty around the timelines as soon as possible for the supply chain to be confident in scaling up to meet demand.

It will also be imperative that enabling policies are in place to support landlords upgrade their properties before 2028.  This should include setting up a national retrofit advice service in England that is accessible to both landlords and tenants. Access to impartial, tailored advice would support landlords to understand how to take forward the recommendations on their EPC and would support them to access finance they are eligible for.

An advice service would also support take up of existing fuel poverty support schemes amongst private renters, such as ECO. To date, take up of such schemes for private rental homes has been limited. For example, the PRS has only accounted for 14% of homes receiving measures through ECO. Given that eligibility for fuel poverty schemes is based on tenant characteristics, a national retrofit advice service in England would support tenants to understand if they are eligible and the next steps for them and their landlord to take to access available funding. A service could therefore play an important role in tying together the various pieces of financial support that both tenants and landlords may be eligible for.    

There is also a need to raise awareness of the standards among landlords, with recent research by Citizens Advice finding that only 1 in 5 landlords were able to correctly identify the current minimum energy efficiency standards. This demonstrates the need for an awareness raising campaign to inform landlords about the standards and what will be required of them in advance of the  standards coming into effect, as well as the available support. Such a campaign would also need to include a call to action by directing landlords and tenants to a national retrofit advice service for example.

It will be particularly important to ensure any campaign tailors its messaging to reach smaller landlords, who are less likely to have the time and resources to properly understand the standards. This is already apparent under the current minimum energy efficiency standards. For example, research has found that single property landlords were less likely to be aware of the current standards and only 31% had made upgrades to their property in the last 5 years compared to 63% of landlords with 5 or more properties.

To enable landlords to be compliant by 2028, the UK Government must also bring forward attractive green finance options as soon as is reasonably possible so landlords can begin to make progress on upgrading their properties. This should include low interest UK Government backed loans for landlords as part of the Warm Homes Plan. It should also be clearly communicated to landlords what financial support is available to them.

We do not have a firm view. Whilst we recognise that allowing landlords to remain compliant with the current MEES under the existing EPC standard supports landlords who acted in good faith to be compliant, there would be benefits to requiring landlords to transition to the new EPC framework as soon as possible, given that the current framework is not seen as fit for purpose to drive improvements in energy efficiency and low carbon heating.

Requiring landlords to transition to the new EPC framework as soon as possible could also help landlords prepare for meeting the new EPC C standard, as well as providing clarity for tenants.

Given that we do not know the extent of the likely impact of this proposal, it is difficult for us to provide a firm view.

We recognise that allowing landlords who have an EPC rating of C before 2026 to be recognised as compliant incentivises early action and gives certainty to landlords that any upgrades they make in the short term will be counted towards the new standards. Without this certainty, landlords may be reluctant to take early action.

However, we would also stress that there are well known issues with the current EPC framework. For example, they are not designed to incentivise low carbon heating due to the focus on lowering fuel costs rather than emissions. Allowing some properties to remain compliant under the current EPC framework would result in those properties being of a lower standard. Having two frameworks for compliance in place is also likely to be confusing for enforcement bodies, landlords and tenants alike.

Without a clear indication of the number of properties that would likely be recognised as compliant under the current EPC framework, it is difficult to assess the UK Government’s proposal and we would recommend the UK Government provide additional impact analysis.

We agree that landlords should be required to get a new EPC before taking action to comply with the new standards. This will help ensure landlords have the most up to date EPC on which to base improvements to their property and mean that upgrades are being made in line with the new EPC framework once in place.

We do not have a view.

Yes, we agree that landlords should be required to commission post-improvements EPCs to evidence what the up to date energy performance status of the property is to tenants and enforcement bodies. Post-improvement EPCs will also be needed for the UK Government to track progress towards upgrading PRS properties, emissions reductions resulting from the policy and fuel poverty reduction in the PRS.

We have concerns that an affordability exemption would risk leaving low income tenants in the worst performing homes behind and would be counterintuitive to the policy’s stated aim of alleviating fuel poverty. We also have concerns that the proposed methodologies outlined within the consultation, such as an exemption based on a blanket rent level or a local authority area based approach, would create a postcode lottery in energy efficiency standards.

We do recognise that it may be sensible to have an affordability exemption in place in a very limited number of circumstances and would recommend the UK Government set out more specific criteria for an affordability exemption, rather than the blanket approaches set out within the consultation.

As discussed, attractive green finance offers should be available to help landlords spread the cost of home upgrades and increase the period of time that costs need to be recouped over. 

We agree that short term lets should be included within the new PRS MEES regulations given the need to upgrade as many buildings as possible to meet our climate commitments.

Short term lets make up a substantial proportion of homes in England and Wales: it is estimated there were around 370,000 short term lets in England and 35,000 in Wales in 2024. As such, they should not be overlooked in efforts to decarbonise the UK’s buildings.

We would also highlight that excluding short term lets from the new standards would create discrepancies between short term lets and the PRS, which may motivate landlords to leave the sector.

We are encouraged to see the UK Government’s ambition to increase the number of smart meters in the PRS, given that they are essential for tenants to access smart tariffs, which can often lead to lower energy bills. Additionally, the in-home display that comes with a smart meter can also support tenants to better manage their energy usage following improvements so that any predicted energy bill savings happen in practice.

However, there remains several challenges around consumer awareness of and confidence in smart meters which will need to be addressed. We recommend the following:

• Launch a consumer awareness raising campaign on the net zero transition which highlights the benefits of energy efficiency and low carbon technologies. This campaign should be well-coordinated with any related messaging on smart meters so that households understand the importance of getting a smart meter to enable them to benefit fully from other measures and technologies. The campaign should also signpost people where to go or what to do to act on the information they’ve received from the campaign, such as signposting to advice services for personalised advice on what they can do next.
• Set up a national retrofit advice service in England to help tenants understand what actions they can take, including how to engage with new, flexible tariffs if they have a smart meter.

We do not have a view.

We do not have a view.

We do not have a view.

We do not have a view.

We believe that to achieve compliance with the new standards, a combination of supportive measures and adequate enforcement that are not covered within the scope of this consultation should be considered.

Greater awareness and advice for tenants and landlords

As mentioned throughout our response, there is a clear need for a greater awareness of energy efficiency and low carbon technologies amongst both landlords and tenants. In the UK Government’s forthcoming Warm Homes Plan, we would like to see a commitment to:

• Launch a national awareness raising campaign on the net zero transition, including the benefits of energy efficiency measures and low carbon technologies. This should also raise awareness of the incoming new standards and direct landlords and tenants to where they can find trusted information.
• Set up a national retrofit advice service in England. This would:
  • Support landlords understand how to upgrade their properties in line with the new standards and for any funding or financial support that might be available to them or their tenants, as has been discussed above.
  • Provide support to tenants, such as guidance on switching suppliers, engaging with flexibility and signposting to additional support services more vulnerable or fuel poor tenants may need.
  • Support tenants by providing post-installation support to help with operating and maintaining any newly installed low carbon technologies to avoid increasing their bills because they are unsure of how to operate their system properly. Post-installation support will also be necessary following the installation of energy efficiency measures as tenants will likely need to implement behaviour changes to fully benefit from lower energy bills.

Access to low cost finance to support for landlords to make upgrades

We recommend that the Warm Homes Plan should enable access to low cost finance for landlords to support them to upgrade their properties. This should include, for example, a UK Government backed low interest loan scheme for landlords to ease the upfront cost burden.

This is already available in Scotland through the Private Sector Landlord Loan Scheme, which provides interest free loan funding of up to £100,000 (£38,500 per property) for landlords registered in Scotland with five or fewer properties. The loans cover a range of energy efficiency improvements and low carbon technologies.

Enforcement

To ensure that all landlords take action to meet the new standards, they will need to be properly enforced. Despite current standards for the PRS requiring rental properties to have an EPC E rating, in 2023, 2.7% of the PRS in England and Wales had an EPC rating below E. This equates to more than 140,000 homes.

Housing standards are enforced by local authorities but with limited capacity, they often must focus resources on fulfilling their statutory duties and tackling the most serious infringements. We recommend the UK Government take forward the recommendations around enforcement outlined by E3G’s recent report on enforcing standards within the PRS.

Flats

Purpose built flats and apartments account for 39% of properties in the PRS in England, despite only accounting for a fifth (22.2%) of all properties in England. Flats face specific challenges to retrofit, including co-ordinating groups of owners, the technical complexity of the retrofit required and varying incomes and ability to pay within groups of owners.

Ownership laws also present a unique challenge in England and Wales as most apartments are leasehold, meaning owners may need the permission of the freeholder to make changes to communal areas or may be unable to make changes at all.  

To date, flats and apartment building have not been adequately reflected in the UK Government’s retrofit policy. Given the higher percentage of flats in the PRS, the UK Government will need to outline a clear roadmap to tackle the key barriers to retrofitting these buildings if we are to make significant progress on improving energy efficiency standards within the sector.

Last year, we published a report considering how to accelerate retrofit of flats in the UK, learning lessons from countries across Europe. We outlined key recommendation for the UK and we urge the UK Government to consider these buildings as part of the Warm Homes Plan.