Some 63% of private rented housing will need upgrades under proposals from the government to bring back minimum energy efficiency standards, according to data science firm Outra.

The government recently announced that it will bring back the commitment for privately rented homes to be a minimum level of a C on the Energy Performance Certificate by 2030. Rishi Sunak in September 2023 removed pledges to require home energy efficiency upgrades.

Across England, Scotland and Wales there is a total of 2,374,965 homes that will need upgrades, when counted by reference numbers used to identify houses (UPRNs).

On a regional basis, the percentage of rented households requiring upgrades is as follows:

Of all the homes that would require upgrades 49% are located in London and the South East where private rents increased by 9.7% and 7.8% respectively in year to July 2024.

Labour has promised to spend an additional £6.6bn over the Parliament to upgrade 5m homes. A Warm Homes Plan will offer loans and grants to promote investment in domestic energy efficiency improvements. However, assuming that each home must spend up to the same amount as under prior regulations (£3500) if the requisite rating cannot be reached, this could cost in the region of £8.3bn.

Giles Mackay, founder of Outra, commented: “The fluctuation in energy prices that followed the conflict in Ukraine and associated supply issues has thrown the cost of energy to households into sharp focus.  The costs of initiatives such as the Energy Bills Support Scheme at £11.9bn is something of a sticking plaster when we could be spending money to inject greater energy efficiency into our built environment and avoiding the repeat costs of support.

“Government has chosen to show the stick and promise the carrot, with green finance schemes to follow. However, the latter is the critical piece to get right. The lessons of previous green finance schemes is that they must be simple and advantageous to the landlord, who ultimately will be the one required to take action.  The scheme must avoid the complexities of obtaining consents and costly valuations and other frustrations to the process.”