A fifth of private tenants suffer from fuel poverty. So why are energy efficiency standards so soft on landlords?

A pensioner keeps warm in North Wales, 2008. Image: Getty.

There is a trend in the UK for more and more people to rent their homes, many from private landlords. Too often, these are cold, energy inefficient homes: over 280,000 homes in cities across the UK that do not meet minimum energy efficient standards.

However, this is soon set to change due to legislation that kicked in at the start of this April. The minimum energy efficiency standards (MEES) will require homes in the Private Rented Sector (PRS) to meet a minimum energy efficiency standard. This is good news for the hundreds of thousands of tenants, who have little or no choice but to live in cold homes. 

It’s not all plain sailing, however. The regulations are currently too focused on the interests of landlords, who are able to exempt their properties from the regulations where improvements would mean an up-front cost. Instead, the regulations should be based on minimising the number of households living in substandard conditions – and the contribution that this policy can make to meeting fuel poverty targets.

The government recently consulted on changing the MEES regulations, with any changes coming into force in April 2019, and introduced the concept of a ‘cost cap’: if the improvements required cost any less than that cap, landlords would be expected to fund improvements. The consultation recommended that such a cap should be set at £2,500.

Yet this will result in less than half of the 280,000 worst properties (those with EPC ratings of F or G) receiving some form of energy saving improvement. In comparison, a cost cap of £5,000 would result in 93 per cent of F and G rated properties being improved. Using the lower cap, alongside the ability for landlords to apply for exemptions, weakens the huge potential that these standards could deliver. 

Some cities are moving to deliver retrofit programmes to improve the energy performance of homes in the PRS, and support the expansion of the energy efficiency industry to maximise activity across all tenures. The Greater Manchester Combined Authority’s (GMCA) Little Bill Programme was the largest Green Deal Communities Programme in England. The scheme, which was targeted at owner-occupied and privately rented homes, worked with over 1,200 households: residents saved, on average, £350 per year on their energy bills.


A call to action

The size of the private rented sector has increased by over 40 per cent in the last ten years, with these properties now accounting for a fifth of housing stock in England. It is widely accepted that this tenure will continue to expand.

And the result? Households living in the PRS have the highest prevalence of fuel poverty: 21.3 per cent compared to 7.4 per cent in the owner occupier sector. This rises to a staggering 45.7 per cent when focusing on F and G rated PRS properties.

Research highlights that cold related illnesses from privately rented F and G properties costs the NHS £35m per year, an estimate I would say is on the conservative side. (This study is based on BRE’s HHSRS cost calculator, which has since been updated, the PRS sector has grown and the English Housing Survey’s (EHS) latest statistics have shown that there has been a reduction in some hazards.)

Inaction to improve the energy performance of privately rented homes will leave thousands of tenants paying higher energy bills for years to come. Average annual energy savings from the government’s preferred cost cap of £2,500 would save a tenant £95 per year. The £5,000 cost cap option could save tenants £188 each year on average.

Increasing the energy efficiency of privately rented properties is therefore key to supporting fuel poverty and carbon reduction targets.  However, achieving this in the private rented sector has historically been challenging. It has long been recognised that minimum standards are key to achieving improvements in this sector.

A step-change in the implementation and enforcement of regulations and energy efficiency delivery is needed. This will establish a clear route map for upgrades, giving landlords and industry the confidence to plan ahead and invest for the future.

Investing in the energy performance of PRS properties can boost economic growth, reduce carbon emissions and support action to eradicate fuel poverty. The rewards of stepping up activity in this area are too good to miss.

Kelly Greer is research director at the Association for the Conservation of Energy (ACE).

 
 
 
 

The Adam Smith Institute thinks size doesn’t matter when housing young professionals. It’s wrong

A microhome, of sorts. Image: Wikimedia Commons.

The Adam Smith Institute has just published ‘Size Doesn’t Matter’, a report by Vera Kichanova, which argues that eliminating minimum space requirements for flats would help to solve the London housing crisis. The creation of so-called ‘micro-housing’ would allow those young professionals who value location over size to live inside the most economically-active areas of London, the report argues argues.

But the report’s premises are often mistaken – and its solutions sketchy and questionable.

To its credit, it does currently diagnose the roots of the housing crisis: London’s growing population isn’t matched by a growing housing stock. Kichanova is self-evidently right in stating that “those who manage to find accomodation [sic] in the UK capital have to compromise significantly on their living standards”, and that planning restrictions and the misnamed Green Belt are contributing to this growing crisis.

But the problems start on page 6, when Kichanova states that “the land in central, more densely populated areas, is also used in a highly inefficient way”, justifying this reasoning through an assertion that half of Londoners live in buildings up to two floors high. In doing so, she incorrectly equates high-rise with density: Kichanova, formerly a Libertarian Party councillor in Moscow, an extraordinarily spread-out city with more than its fair share of tall buildings, should know better.

Worse, the original source for this assertion refers to London as a whole: that means it includes the low-rise areas of outer London, rather than just the very centrally located Central Activities Zone (CAZ) – the City, West End, South Bank and so forth – with which the ASI report is concerned. A leisurely bike ride from Knightsbridge to Aldgate would reveal that single or two-storey buildings are almost completely absent from those parts of London that make up the CAZ.

Kichanova also argues that a young professional would find it difficult to rent a flat in the CAZ. This is correct, as the CAZ covers extremely upmarket areas like Mayfair, Westminster, and Kensington Gardens (!), as well as slightly more affordable parts of north London, such as King’s Cross.

Yet the report leaps from that quite uncontroversial assertion to stating that living outside the CAZ means a commute of an hour or more per day. This is a strawman: it’s perfectly possible to keep your commuting time down, even living far outside of the CAZ. I live in Archway and cycle to Bloomsbury in about twenty minutes; if you lived within walking distance of Seven Sisters and worked in Victoria, you would spend much less than an hour a day on the Tube.

Kichanova supports her case by apparently misstating research by some Swiss economists, according to whom a person with an hour commute to work has to earn 40 per cent more money to be as satisfied as someone who walks. An hour commute to work means two hours travelling per day – by any measure a different ballpark, which as a London commuter would mean living virtually out in the Home Counties.

Having misidentified the issue, the ASI’s solution is to allow the construction of so-called micro-homes, which in the UK refers to homes with less than the nationally-mandated minimum 37m2 of floor space. Anticipating criticism, the report disparages “emotionally charged epithets like ‘rabbit holes’ and ‘shoeboxes,” in the very same paragraph which describes commuting as “spending two hours a day in a packed train with barely enough air to breath”.


The report suggests browsing Dezeen’s examples of designer micro-flats in order to rid oneself of the preconception that tiny flats need mean horrible rabbit hutches. It uses weasel words – “it largely depends on design whether a flat looks like a decent place to live in” – to escape the obvious criticism that, nice-looking or not, tiny flats are few people’s ideal of decent living. An essay in the New York Times by a dweller of a micro-flat describes the tyranny of the humble laundry basket, which looms much larger than life because of its relative enormity in the author’s tiny flat; the smell of onion which lingers for weeks after cooking a single dish.

Labour London Assembly member Tom Copley has described being “appalled” after viewing a much-publicised scheme by development company U+I. In Hong Kong, already accustomed to some of the smallest micro-flats in the world, living spaces are shrinking further, leading Alice Wu to plead in an opinion column last year for the Hong Kong government to “regulate flat sizes for the sake of our mental health”.

Amusingly, the Dezeen page the ASI report urges a look at includes several examples directly contradicting its own argument. One micro-flat is 35 m2, barely under minimum space standards as they stand; another is named the Shoe Box, a title described by Dezeen as “apt”. So much for eliminating emotionally-charged epithets.

The ASI report readily admits that micro-housing is suitable only for a narrow segment of Londoners; it states that micro-housing will not become a mass phenomenon. But quite how the knock-on effects of a change in planning rules allowing for smaller flats will be managed, the report never makes clear. It is perfectly foreseeable that, rather than a niche phenomenon confined to Zone 1, these glorified student halls would become common for early-career professionals, as they have in Hong Kong, even well outside the CAZ.

There will always be a market for cheap flats, and many underpaid professionals would leap at the chance to save money on their rent, even if that doesn’t actually mean living more centrally. The reasoning implicit to the report is that young professionals would be willing to pay similar rents to normal-sized flats in Zones 2-4 in order to live in a smaller flat in Zone 1.

But the danger is that developers’ response is simply to build smaller flats outside Zone 1, with rent levels which are lower per flat but higher per square metre than under existing rules. As any private renter in London knows, it’s hardly uncommon for landlords to bend the rules in order to squeeze as much profit as possible out of their renters.

The ASI should be commended for correctly diagnosing the issues facing young professionals in London, even if the solution of living in a room not much bigger than a bed is no solution. A race to the bottom is not a desirable outcome. But to its credit, I did learn something from the report: I never knew the S in ASI stood for “Slum”.