"Whilst landlords across the UK are willing to make changes so that their properties are more energy-efficient for tenants, they lack the knowledge and financial support to do so"
- Gail Parker - British Gas
A new report from British Gas into greening the private rental sector has highlighted how landlords across the UK feel about upgrading their properties to support the journey to Net Zero alongside the other pressures they are facing including high interest rates on their mortgages.
The private rental sector makes up around 19% (4.6 million)of all UK households and as it stands, falls behind its owner-occupied and socially rented home counterparts when it comes to low-carbon heating solutions. In fact, nearly two-thirds of privately rented homes in the UK (over 3 million homes) require energy efficiency improvements like low-carbon heating and smart technology installations.
EPC and Property Value
The report found that landlords are concerned about the environment and think the UK government and public generally are taking too little action to address climate change (56%). However, they remain unconvinced that making environmental improvements will benefit their property and its rental value.
One of the main barriers for landlords upgrading their properties comes from a lack of knowledge about EPC standards, with 44% of respondents not knowing their EPC rating. However, the requirement for the EPC rating to be E or higher has already been in place since 1 April 2020.
Additionally, two-thirds of those surveyed either don’t know or have overestimated the average cost of bringing a property up to EPC C standard, which had previously been a target for rental homes before the Prime Minister changed Net Zero policies in September 2023. The cost of bringing a property up to this standard is estimated to be £7,430. There is also a lack of knowledge about the grants available with over half (52%) of those surveyed stating that they do not know enough about their options.
Gail Parker, Director of Low Carbon Homes at British Gas says: ”This report shows that whilst landlords across the UK are willing to make changes so that their properties are more energy efficient for tenants, they lack the knowledge and financial support to do so.
"It's key that we work with the government and the industry to ensure they have the ability to make these changes easily and affordably. We are calling for more focus to be made on the issue to help make homes more energy efficient for everybody, not just people who own their own properties.”
Perceived Tenant Desires
Another barrier in landlords upgrading their homes comes from miscommunication about what their tenants want. Landlords think that tenants don’t find these improvements attractive, despite nearly half of tenants considering a lack of green practices to be a deal breaker when choosing a property.
Despite this, only 30% of landlords report receiving requests from tenants for green technology and of the tenants that had made a request, landlords were responsive to these requests with the majority (61%) making an installation as a result.
In addition, landlords think it is their responsibility alone (31%) or it is a shared responsibility between the landlord and government (28%) to pay for environmental improvements, and don’t think it should be the tenant’s responsibility.
However, there are mixed opinions on whether the tenant has any responsibility for organising and overseeing installation, with a third expecting the tenant to have a shared responsibility (33%), and over half that the tenant should not be involved at all (51%).
In response to the findings, there are a number of recommendations from British Gas for the government to consider which could help close the gap between the homeowner and private rental sector, helping landlords increase energy efficiency and helping renters with warmer homes and lower bills. These include:
Introduce a Green Upgrade Relief which allows landlords to deduct green improvements from their annual income;
Introduce government-kitemarked loan terms for private lenders to offer low and no-interest loans partially funded by the UK Infrastructure Bank;
Launch a one-stop shop for advice and guidance service from Energy Saving Trust modelled upon Scotland’s Home Energy service, something British Gas and Barclays have started by launching a series of free events to help Plymouth residents explore how to make their homes more energy efficient;
Start the data-gathering process to implement Building Passports for individual properties;
Update the Renters Reform Bill so landlords cannot reasonably refuse smart meter installation, to strengthen renters’ rights and awareness of rights
Gail Parker concludes: “With energy efficiency, it’s critical we find the right solutions for each home so that we can lower emissions and help customers to make savings on their bills. Landlords can use our home health check which will allow them to see what they can do to bring their home's efficiency to a better standard and equip them with the knowledge they need ahead of making any green changes.
“The recent update to the government grant for heat pumps rising from £5000 to £7500 in England, has made it more accessible for people to upgrade homes. At British Gas, we will also continue to reassure customers with our best-price heat pump offering that’s guaranteed to heat homes as efficiently as a gas boiler.
"This year, we also launched a new suite of Net Zero services to support customers in solar, insulation, home energy efficiency and electric vehicle (EV) charging.“