Successive governments have urged the public to improve the energy efficiency of their homes. With buildings producing the lion’s share of carbon emissions in a country with a large proportion of old housing stock, there is plenty of work to be done. This applies in particular to the rental market where, with the introduction of the Minimum Energy Efficiency Standards (MEES) Bill, landlords will be expected to upgrade their properties to meet the requirements of the new regulations.  

But as we’ve said in this blog many times, not all landlords are wealthy individuals or corporates with large portfolios and money to spend. There are plenty of small landlords out there who rely on their rent to provide themselves with an income and they don’t have thousands of pounds to spend on potentially expensive energy efficiency measures.

A report in Landlord Today estimates there are almost 3 million rental homes in need of improvement to bring them up from EPC grade E to the new requirement of grade C. They put the cost of this at an estimated sum of £9,872 per home. That’s around £29 billion in real money and it's a huge cost to landlords already hard hit by tax changes and new regulations.

This is the problem that the Government’s ill-fated Green Homes Grant was designed to help tackle, by providing £1.5bn to cover the cost of upgrades for those without the cash to fund improvements themselves. Unfortunately the grant was scrapped at short notice last year due to a disastrous rollout that meant the scheme failed dismally and left homeowners and landlords high and dry. The cash support has now been passed back to local authorities to distribute but funding has been reduced to just £562m and is being targeted specifically at low income families.

So what now for landlords? To date the Government’s approach to the rental sector, as Kamma chief executive Orla Shields said in the press today, has been “all stick, no carrot”. This isn’t good enough. If we are to see widespread improvements in the energy efficiency of rental homes, there must be incentives - not just penalties. And exemptions to the MEES regulations, which are still being discussed, are not helpful. Designed to cap the cost of improvements for owners of the least energy efficient housing, they will simply mean emissions continue to be produced by the poorest housing stock.

A new, properly thought out and efficiently delivered government-backed fund is needed to promote environmental improvements and help landlords contribute effectively to the UK’s net zero target.