A government proposal to cap landlord contributions towards retrofitting domestic properties at £2,500 per home is flawed, a leading sustainability policy adviser has warned.
Next month, the Minimum Energy Efficiency Standards (MEES) come into force, and will require privately rented properties in England and Wales to achieve an Energy Performance Certificate (EPC) rating of E. However, it is still unclear what financial implications this will have for domestic landlords.
In December, a consultation was launched on the government’s plan to limit landlord contributions towards upgrading homes at £2,500 per property. However, the government’s own impact assessment shows that 70% of homes in the lowest two EPC bands – F and G – would not be elevated into band E with such low investment.
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“The government is proposing a policy that will not work,” said Richard Twinn, policy adviser at the UK Green Building Council. “Since the demise of the Green Deal, it has been clear that a cost cap for landlords is the only effective way to implement the MEES. Unfortunately, the proposals included in the consultation risk watering down the policy.”
There are 280,000 domestic properties which are F and G rated. Under MEES, landlords are expected to use their own funds or – less likely – secure finance from the Green Deal or Energy Company Obligation (ECO).
Twinn says the cap idea is “broadly sensible”, and by making landlords bear the brunt of the retrofit cost, it aligns the domestic sector with the private commercial sector. “The problem is that it is too low,” he explained. “With a £5,000 cap, 260,000 band F and G properties would be lifted into band E.
“With the current proposal, landlords will still have to make some improvements, but the properties will be less energy efficient than they would have been.”
He added: “This undermines the overall policy goals of the Government’s Clean Growth Strategy – which aims to get all properties up to band C by 2030 (the average is currently D).”
The MEES private rented sector consultation ends on 13 March.
