Targets too Ambitious:
The Business, Energy and Industrial Strategy Parliamentary Committee has launched an inquiry into the Government’s approach to delivering energy efficiency improvements to buildings.
This inquiry is examining whether the Government’s current delivery of energy efficiency improvements within residential, commercial and public-sector buildings is consistent with meeting targets set out in its Clean Growth Strategy.
The inquiry is also likely to focus on action to upgrade the energy efficiency of fuel-poor homes and the Government’s work to drive demand for energy efficiency measures within able to pay households, says the committee.
The government says that energy efficiency is high on its agenda, with targets getting progressively stricter in the run up to the 2030, when private rented properties must have an EPC rating of C or better.
However, in submitting its respond to the now closed consultation, which asked – are the targets too ambitious? – ARLA propertymark argues that, yes, they are too ambitious.
“We argue that the Government’s targets are too ambitious and will result in landlords having to spend serious amounts of money refurbishing properties to bring them up to an EPC rating of C by 2030.
“This is at a time when landlords with buy-to-let residential properties face hits to their net profit through a series of recent government policies such as cutting mortgage interest relief, stamp duty surcharges and other tax changes.
“Little funding assistance is offered to landlords to help them spread the cost of remedial work, meaning that money needed for improvement has to come from their own pockets.
“We proposed that the Government should take an alternative approach and move towards a property MOT system that encompasses many elements of property standards, including energy efficiency and safety checks.
“The MOT approach would mean that tenants could be confident in the standard of their home, and rogue landlords would be deterred from remaining in the sector. It would also give landlords greater clarity on their responsibilities and be able to deduct the cost of the MoT from Income Tax,” says ARLA propertymark.
ARLA argues that the 2035 target for all homes in the UK is achievable, but for the social housing sector only, as this sector is supported by government funded initiatives. However, for the private rented sector it’s a different story, ARLA says.
“The private rented sector is the second largest tenure type, making up approximately 20% of the total market and is growing, but the sector lacks the funding pots that benefit the social sector, which makes up 17% of the total housing stock by tenure.
“We argue that all future ECO funding should be stopped and all future funding from energy suppliers should be dedicated to the private rented sector, redressing the imbalance of previous years,” says ARLA propertymark
ARLA thinks that properties with ratings below E would cost nearly £6000 to bring up to standard, rather than the £1200 suggested by the Government, and it would generally be uneconomic for landlords to upgrade many of these properties. In these cases landlords could be well advised to sell, rather than tackle the energy efficiency issue, warns the agents’ body.
This would of course be detrimental to tenants because it would lead to rental property scarcity, higher rents and would also go against the government’s policies of tackling homelessness.
ARLA propertymark suggests:
“We’d like to see the Government make it easier for landlords to access funding whilst also reversing its decision to introduce the “landlord contribution” element to bring properties up to the target EPC ratings. If they don’t do this, more landlords will sell off part or all of their portfolios and the problem will instead be transferred to a different housing tenure.”