Landlords

1 in 20 rental properties pose ‘excess cold hazard’ to tenants

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4th October 2017

A new study by AXA has revealed that while the private rental sector has seen a rapid improvement in energy efficiency over the past two years, there are still properties out there that fail to meet the minimum standards and some that even pose a significant health risk.

According to the report, the number of worst-rated properties has halved, and rentals come out better on boiler upgrades, insulation and smart meters than owner-occupied homes. Despite this, one in twenty rentals still breach minimum standards set to come into force next April. These pockets of inefficiency mean that tenants are over-paying on energy by an estimated £13 million every month.

Energy is certainly top of mind for UK tenants, as cold and damp were named the biggest bugbears by 43 per cent of those surveyed. A quarter said they felt they were paying excess bills due to the energy inefficiency of their homes.

The study found that one in twenty rental properties pose an ‘excess cold hazard’ to residents as they fall into the worst-rated Bands F and G. This means that more than 200,000 homes are now at risk of being banned from the private rental market next April when minimum standards come into force.

Just how much these failing homes are costing tenants was revealed by analysis of their monthly bills. The average monthly bill in a Band A rental is £61 per month, increasing to £76 in Band E, and then £112 in Bands F to G. This means that UK tenants are still paying for energy failings to the tune of an estimated £13 million every month.

The good news is that the number of failing properties is declining fast: the study found that the number of F and G banded rentals has halved since 2015, when official estimates put them at one in ten. More than half of tenants surveyed by AXA said their current rentals are in bands A to C.

The private rental sector also compares well when it comes to energy upgrades. Tenants in England and Wales are now more likely to have smart meters installed than people who own their own homes, and there are fewer inefficient (pre-2005) boilers in rentals too.

Energy features in tenanted properties compared to owner-occupied (England and Wales)

RENTAL HOMES

ALL HOMES

Double-glazing

73 per cent

75 per cent**

Roof insulation

57 per cent

35 per cent**

Smart meters

14 per cent

12 per cent**

Post-2005 boiler

69 per cent

59 per cent***

Solar panels

1 per cent

6 per cent****

Wood-burning stove

6 per cent

7.5 per cent*****

The picture looks even better north of the border, where Scottish tenants report the highest energy efficiency in the UK. Eighty three per cent of rentals have double glazing, 76 per cent – roof insulation, 73 per cent –modern boilers, and 15 per cent have wood-burning stoves (double the average elsewhere in the UK).

AXA advises landlords running properties in the worst-rated bands to consider upgrading their properties as a matter of urgency. While those in Bands F and G will be forced from the market next year, those in Band E may well join them over the coming years following last week’s recommendations to Government by Frontier Economics.  Help is on offer to landlords under schemes like the Green Deal, while tenants on low incomes can access support from the Affordable Warmth Obligation.
 
Gareth Howell, Managing Director, AXA Direct, had this to say: “Our study has found that landlords are making significant investments into improving the energy efficiency of their properties. And this is part of a bigger trend: when we look at our surveys of tenants and landlords over the past five years, we see progress across the board – on security, maintenance and numbers with proper tenancy agreements in place. Many landlords we speak to are ‘accidentals’, who typically own one or two properties.

They are, by and large, professionalising and investing more seriously in their tenants’ comfort and the future health of their rental properties. Pockets of failure exist in this market, but it is not the story for the 95 per cent of landlords who are trying to do the right thing.”

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