Tenants are putting additional pressure on landlords to improve energy efficiency
While most of these changes are driven by legal obligations, recent research by Shawbrook Bank has revealed another area where concerns have been raised. 21% of property renters have spoken to their landlords about making improvements to their properties as a means of increasing the levels of energy efficiency. What has been the primary motivation for tenants to pick up this conversation?
The cost-of-living crisis is an ongoing motivator for tenants
Tenants have become increasingly concerned about the cost-of-living crisis, which we have written about recently. In the past year, we have seen unprecedented financial changes for renters, especially as UK rent growth is at its highest level in years. The ONS said the UK rise of 4.7 per cent represented the largest annual percentage change since January 2016.
Any steps that tenants can take to lower their monthly outgoings and bring utility bills down are likely to be considered. This, mixed with the legal requirement to meet minimum specifications for EPC ratings, means making energy efficiency improvements will continue to be a consideration for landlords in the coming months.
What home improvements landlords might consider
Various home improvements can be made across a property to bring down the amount of money a tenant will be spending on their bills. You might expect a landlord to have questions about how they could release mortgage equity to fund some of these changes:
- Installing double-glazed windows
- Insulating the walls and loft of the property
- Replacing the boiler with a more energy-efficient one
- Fitting solar panels to produce green energy
As an advisor, it would be worth understanding the cost implications of making some of these home improvements to understand the financial landscape for landlord clients.
Double glazing, for example could be anywhere between £600-£1,800 per window. With a more ambitious project like solar panels, homeowners could be looking at £5,500 for a standard system to help improve EPC ratings.
If advisors have already had a conversation with landlord clients around EPC ratings, these types of improvements can allow them to meet both the expectations of tenants and upcoming legal requirements.
Some government schemes haven’t been fully utilised
Some government support is available to help landlords improve the energy efficiency of their properties but the majority of landlords may lack awareness of the specifics.
The UK government launched the Boiler Upgrade Scheme in April 2022 to provide support to those who were required to improve the EPC rating of their property. The specifics of the grant allow UK households, including private landlords, to apply for a grant of up to enable them to replace an existing heating system with a heat pump or low-carbon equivalent.
This scheme might be the exact type of support your landlord clients are searching for, but it has been met with publicised criticism from ministers as the uptake from the public is low. This could be down to lack of information, which is why it’s important to highlight these options to your clients so they can consider their options.
Speaking to clients about their energy efficiency plans could help them consider to their options to tackle the increasing pressure of improving EPC ratings and relieve the financial burden of improvements.
