A new study carried out by AXA insurance has found that around one in 20 rental properties in the UK do not yet meet minimum energy standards, though landlords are making significant progress towards meeting the required standards, AXA found.
As a general rule, an Energy Performance Certificate (EPC) is required every time a home is put up for sale or for rent. So, a landlord needs one to show potential tenants the property’s energy rating, and a seller must have one to show to potential buyers.
There are a few exceptions, for example a lodger landlord won’t need one for a room that’s being rented out and listed buildings may also be exempt as they can’t have some upgrades like double glazing.
The requirement for an EPC has been the law since 2008 (2009 in Scotland), meaning that if your home has been let or sold since then it should have one. They remain valid for 10 years.
There’s a national register of EPCs, unless you’ve opted out, where you can take a look at your property’s previous certificates, as well as viewing similar properties in the neighbourhood for a comparison of energy efficiencies.
From April 2018 all rental properties must have and EPC rating of E or above, therefore the 5 per cent of properties, a significant number, (around 200,000 households) currently with ratings of F and G, will be illegal next year, if they have not been improved by then.
Poor energy performance (an energy rating of F and G) will not only cost tenants more money to run their heating, it often leads to insufficient heating in the home which in turn leads to condensation and black mould growth, a serious health hazard. AXA estimates that tenants in an A rated property would pay an average of £61 per month on energy, compared to bands F to G which would cost around double that at £112.
However, the private rental sector (PRS) in the UK is experiencing significant energy efficiency improvements, with landlords taking measures to gradually bring their inefficient properties up to standard,. AXA estimates the number of F and G rated rental properties has halved since 2015. However, it would seem from this study that there is a significant number at around the 200,000 mark still failing to meet the minimum standards.
AXA estimates that with this level of below-standard housing, poorly insulated and with inefficient heating systems, tenants occupying these homes will be over-paying on their energy bills in total by around £13 million per month.
Gareth Howell, managing director of AXA Direct has said:
“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.”
Mr Howell thinks that many of the landlords insured with AXA are accidental landlords who typically own just 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 vast majority,” Mr Howell said.
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