How to spend seven years not making bad housing much better

May 2, 2018

Following the publication of Labour's new domestic energy efficiency strategy, Alan Whitehead takes aim at the scandalous loophole that will allow landlords to keep renting the coldest and most inefficient homes


If you are a landlord and you are about to let out your property, you may know (or you should know) that as from the beginning of April of this year, you have needed an energy Performance Certificate for your property, and you will not be able to let it out if that certificate shows your property is below band E.


This is all very good, at least from an energy efficiency and a tenants point of view. Heating an F or G rated property is a nightmare - the cost will be some £600 more than even an E rated house, and overall more than £1,000 more than the average home. It is no wonder that there are 280,000 people living in fuel poverty in England and Wales, mostly in homes rated F or G. These really cold and hard to heat properties lie substantially in the private rented sector.


The requirement to ensure that landlords now adhere to minimum energy efficiency standards in properties they are letting out comes from the 2011 Energy Act. I was a member of the Bill Committee at the time, and a number of us on the committee wanted the date for the new provision to be not later than 2016. No, we were told, it should be 2018 to allow landlords time to adapt and do the necessary work on their properties. 


So that's all right, then, better late than never, but at least it's here now, and woe betide those landlords who don't bring their properties up to scratch.


Except that is, unfortunately, not how it is. The reason you have probably not done anything about bringing your property up to scratch if you are that F or G rated house-owning landlord, is that after the Bill became law, the government spent four of the seven years between then and now thinking about how to bring the new law into practical being. They decided after four years of head scratching, that landlords should have a sort of, notional, limit of £5,000 for spending on uprating properties to band E, but that if they availed themselves of a fabulous Green Deal Finance Plan to get the work done, then that would cover the notional limit and they would be regarded as complying. Job done; the regulations were promulgated in 2015, writing Green Deal Finance Plans into the regulations. 


This was though, very shortly before the government decided that Green Deal had been such a catastrophe in practice that they were pulling the plug on it. Or to give a precise chronology: 

1. Government legislates to pin landlords energy improvements on Green Deal  March 2015.

2. Government pulls the plug on Green Deal July 2015.


All of which leaves the spanking new start date for the new regulation pretty much dead in the water, since you are unlikely to be able to enforce a regulation citing something that landlords cannot do. 


So, three long years have passed since this apparent impasse became manifest. And the government has now come up with a new plan: pass a new set of regulations which scrap the requirement for landlords to take out a Green Deal plan, and instead require them to spend not more than £2,500 (half the original notional sum) after which they would be exempt from the requirements even if that expenditure doesn't actually bring the property up to Band E. That's what they have just consulted on and appear to be about to go ahead with.


This, however, seems to be getting a little lost as far as the original purpose of the legislation was concerned (and I should say about as lost as you probably are now given this meandering saga…).

The aim was to get properties up to at least band E by about now, so that F and G properties - the really leaky, and frankly virtually uninhabitable homes - were off the country's books, at least in the private rented sector. Estimates were that over 70 per cent of those properties would be uprated to band E with the original requirements in place. The new proposals look like - according to the impact assessment on the consultation - they will only cover 30 per cent of the substandard properties. So landlords, if you are still reading this, spend up to £2,500 (about two and a half months rent in my part of the world) and even if you are then the owner of a still leaky, cold, hard to heat home, you're in the clear with the new regulations.  


All of which in turn should be pretty worrying to anyone who has followed the publication of the recent Clean Growth Plan, which sets out, among other things what the ambition is for energy efficiency in homes as part of their contribution to measures to reduce CO2 emissions and meet the terms of the fifth carbon budget.


The ambition for the 2.5 million 'fuel poor homes' is to have them improved 'to energy efficiency rating C or better by 2030'. That might be a bit difficult to achieve even with demanding standards, but it is undoubtedly made rather more challenging by the presence of hundreds of thousands of mostly fuel poor homes in private rented hands sanctioned by the new legislation as permanently below standard, with nothing anyone else can do about it.


Alan Whitehead is Shadow Energy and Clean Growth Minister and Labour MP for Southampton Test


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