The government has legislated for the UK to reach net zero carbon emissions by 2050, with intermediary targets of a 68% reduction by 2030 and a 78% reduction by 2035 (compared to 1990 levels).
However, there are there are many challenges when it comes to decarbonising homes and cutting carbon emissions, especially in the owner-occupier market, with costs representing the biggest barrier to green home improvements. Retrofitting social housing will also be major challenge for local authorities and housing associations.
So far, government regulations designed to help encourage retrofitting have focused on the private rented sector, where Minimum Energy Efficiency Standards (MEES) have been introduced requiring private rented properties to have a minimum rating of EPC band E. The government has proposed increasing this MEES requirement to EPC C or above by 2025 for new tenancies, and by 2028 for all tenancies.
A recent analysis of Energy Performance Certificate (EPC) data conducted by Propflo, a decarbonisation platform for lenders, reveals that the UK economy stands to benefit by a minimum of £28bn at a cost of £23bn – resulting in a net gain of £5bn – if privately rented properties below an energy rating of C undergo complete retrofitting with all recommended improvements.
However, should landlords choose to undertake only the minimum work to comply with the proposed MEES, the economic gain would be £8.7bn against costs of £13.9bn, translating to a net economic cost of £5.2bn. This emphasises the importance of supporting and incentivising landlords to surpass the minimum requirements in order to fully unlock a property’s energy efficiency potential.
The analysis of EPC data includes calculations of costs and lifetime energy savings. This assessment, however, does not account for additional benefits such as enhanced property value, mortgage and tax savings, job creation, and improvements in energy security, health, and overall well-being.
While a significant majority of privately rented properties below a C would need spending close to or at the £10,000 cap (over 80%), 2% of properties would only require an average expenditure of £311 to achieve compliance, while another 6.2% would require an investment of £1,514 per property.
The analysis also demonstrates that 81% of properties within scope have at least one low-cost energy efficiency improvement recommendation, including energy-efficient lighting or loft insulation, and approximately 0.2% of properties only require a single low-cost improvement to attain a grade C rating.
Furthermore, approximately 0.6% of properties may be eligible for exemptions based on high costs or third-party consent, and 7.7% are within the scope of the wall insulation exemption (subject to expert advice confirming that the work would not negatively impact the building’s structure).
This analysis comes as the deadline for meeting new MEES regulations – expected to be announced later this year – could be relaxed.
Luke Loveridge, Founder and CEO, Propflo, said: “MEES should be viewed as both an economic opportunity and a means to enhance our energy security, address fuel poverty, and meet our legally binding carbon targets. Whether the deadline is 2028 or not, the government should explore avenues to provide support to private landlords, enabling them not only to meet the minimum standards but to exceed them.”
And those Landlords with houses that would need the £10k spending on them will then sell when they can’t afford it, and that will be another house lost for Tenants. If the Landlord can sell it, as EPC’s are being touted so much that people will be too scared of a lower rating thinking it means they will need to sacrifice a child every year to pay the bills…
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I don’t know anyone who has had contact with the ‘green companies’, not seen the rolling £k’s of business opportunity to them. Forgotten is the impact on the environment to run and supply green policies to the end result, questioning the degree of requirement is counter productive? A study has shown that 20mph will result in longer travel times = more carbon emission, not forgetting cyclists will be required to give a 1.5 meter gap when overtaking motor vehicles, lol.
Certainly there will be further losses in rented properties due to costs and for some, the basic principle of being told! This will impact more on the environment with more properties not required to comply and misery for those tenants out on the street with their children.
There is a big debate in the USA over banning gas stoves. So while we lose our ‘norm’ central heating and hot water, this will also mean loss of your gas fire and cooker? And we are only talking rented by 2028. Wait till the general population get hit with the requirement and its all very quiet on that front ….. I wonder why?
I wonder if anyone in government (if they can be trusted?) can actually come up with the figures of how much they are saving the planet or counter productive to implement, manufacturing etc? There lies the real problem, industry is the biggest polluter running 24/7, not a tenant out at work all day who doesn’t use the central heating for 6 months plus a year, 30 minutes to boil a pan or 10 minutes to fry and egg on a gas ring.
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I’d be interested to see how the Government would plan to force homeowners to upgrade their properties. I simply don’t think it can be done without far more problems than they can deal with!
Government – you have to have your house as a C rating.
People – Ok, I’ll sell it and go into rented.
Gov – nope, can’t sell it without a C rating, and we won’t house you if you make yourself homeless without a Court order!
People – Ok, I’ll default my mortgage, so the lender repossesses it via Court, then you have to house me, and the Lender has to improve the property at their cost. Then when I’m ready, I’ll buy a repossessed house, that has been upgraded. Good luck with the banks raising heck over having to pay out of pocket for the improvements, and the financial chaos that will ensue as they try to recoup their money via interest rates/higher deposits that will scupper the housing market and plunge the economy so far down it’ll hit the centre of the earth…
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You might just as well say raising taxes by 50% would be a boost for the economy as well. The economy is boosted when wealth increases. Paying for EPC upgrades does not generate additional wealth it just redistributes wealth by forcing people to spend money that already exists. It’s a bit like using your savings to pay the bills as your wages have not kept pace, eventually the savings will be gone and you will be in a personal recession its exactly the same for the country. It’s a valid argument that this country could do with a bit of wealth redistribution but if no new wealth is generated as a country overall we all get poorer and the people who are already poor will feel the effects the most.
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Some quick facts:
1. The UK amounts to 1% of global emissions.
2. Housing makes up 25% of UK emissions.
3. 20% of UK home are part of the PRS.
4. That means 5% of UK emissions are due to the PRS, or 0.05% of global emissions.
IF WE BUILT MORE HOMES that would also boost the economy, not to mention fix the current housing crisis… but the government doesn’t want to actually pay for anything itself.
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We will spend your money on your behalf, but cheer up, it will boost the economy! The same might be said for digging a hole in the ground and pumping carbon dioxide into it. I mean, who could doubt the merits of such a thing? The essence of the green economy is the removal of choice – we can embrace this if we believe ‘the science’, but dressing it up as boosting the economy seems disingenuous in the face of the change to the social contract that it brings.
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