Landlords of private rented homes face having to pay up to £10,000 on energy efficiency improvements under new government proposals published today (30 September) as its Green Homes Grant scheme goes live for applications.
Homeowners and landlords will be able to apply today for GHGs, which will be worth up to £5,000 for the typical household and £10,000 for those on low incomes, to fund energy efficiency and low carbon heat upgrades.
In addition, the Department for Business, Energy & Industrial Strategy (BEIS) has published proposals to tighten the rules on energy efficiency in the private rented sector.
A consultation paper, issued by the department, says newly let private rented homes must comply with the Energy Performance Certificate Band C standard from 2025 and all tenancies from 2028.
The paper’s other key proposal is that the cap on the sums, which private landlords will be expected to pay in order to bring their energy inefficient properties up to scratch, will be nearly trebled from the current level of £3,500 to £10,000.
The maximum fines which councils to be able to impose on landlords, who fail to comply with the new standards, will be increased to £30,000 per property
The government estimates £4,700 is the average amount landlords, who will also be eligible to apply for GHGs alongside owner-occupiers, will have to pay to bring their properties up to the Band C standard.
According to figures in the consultation paper, only around one third of the UK’s approximately 4.8 million private rented homes meet Band C.
The government estimates that that raising the energy efficiency of private rented homes to a minimum Band C standard will save 6.1 megatonnes of carbon dioxide in the fifth Carbon Budget period from 2028 to 2032, which equates to just over half of the sector’s total emissions.
Around 900,000 low-income households would be upgraded to energy efficiency Band C under the proposals, saving tenants an average of £220 annually on their energy bills.
The paper says that privately rented households are twice as likely as their counterparts in social and owner-occupied housing to be fuel poor.
An impact assessment, published alongside the consultation paper, estimates that the cost to landlords of the mass upgrade of the private rented sector to Band C will be approximately £12.7 billion, with tenants saving £7.3bn on their energy bills.
But the consultation paper suggests that the upgrades should be affordable to most landlords of whom only five per cent receive less than £5,000 per annum from renting out their properties.
The government’s statutory target is that all fuel poor households must be living in Band C properties by 2030.
Responding to the announcements, Energy UK chief executive Emma Pinchbeck said: “Building back better can begin at home. Improving the energy efficiency of our houses makes them healthier and more comfortable to live in and can cut hundreds of pounds a year off bills – all while reducing emissions and creating jobs. It shows how a green recovery focused on net zero can benefit the environment, the economy and customers.”
Michael Lewis, chief executive of Eon UK, said: “We’ve consistently said ensuring homes are fit for the future is one of, if not the, best ways of stimulating our economy and creating jobs, as well as helping to meet net zero carbon targets. As a major partner to local authorities on the LAD (Local Authority Delivery) scheme, today’s announcement means we can accelerate our work to make homes more comfortable, healthier and cheaper to heat.”