A recent online Q&A shed light on fuel poverty in the private rental sector (6th December 2023), featuring a panel of top experts, including academics and industry professionals. They discussed critical issues affecting both renters and landlords, providing a comprehensive overview of the sector’s challenges and opportunities.
The discussion was led by the insights of the panel – Dr. Jennifer Harris (Tenancy Deposit Service), Dr. Richard Waldron (Queen’s University Belfast), Dr. Neil Simcock (Liverpool John Moores University), and Lord Richard Best.
Themes such as energy inefficiency, tenant rights, fuel poverty, and the effectiveness of existing policies like MEES (Minimum Energy Efficiency Standards) dominated the discussion. The experts provided a nuanced perspective on each theme, offering insights into both the problems and potential solutions. The discussion emphasized the need for systemic policy reforms that compel and support landlords to upgrade their properties, whilst protecting tenants from the repercussions of voicing concerns.
Here are the key questions and related discussions.
What are the main reasons for poor energy performance in the private rented sector?
Panelists identified several interlinking factors contributing to poor energy performance in the PRS:
- Inconsistent Local Enforcement: Local authorities vary widely in enforcing housing standards and energy efficiency regulations. Factors like reduced council budgets, limited temporary housing for non-compliant homes, and lack of data on property and energy efficiency contribute to this inconsistency. Often, enforcement relies on tenant complaints, which many hesitate to make.
- Tenant Disempowerment: Many tenants feel unable to demand better housing conditions, fearing “no fault” evictions amidst rising rents and social housing shortages. This issue is particularly acute for low-income and marginalized groups, often compounded by a lack of knowledge about their rights and available support.
- Limited Incentives for Landlords: Landlords lack immediate financial benefits for improving property conditions and energy efficiency. Since warmer homes and lower energy bills mainly benefit tenants, and property upgrades don’t necessarily lead to higher rents, there’s little market drive for enhancements. This makes strong, enforced regulations essential.
- Financial Constraints of Landlords: Many landlords, particularly those owning just a few properties, face financial limitations, exacerbated by rising mortgage rates. This hinders their capacity to invest in property improvements.
What is the effectiveness of current policies like the Minimum Energy Efficiency Standards?
Discussion on Minimum Energy Efficiency Standards (MEES) revealed a consensus that while the policy is a step in the right direction (due to being proactive and tackling the root issue of poor energy efficiency), its effectiveness is limited by enforcement challenges and a complex system of exemptions. “MEES could be a game-changer, but it’s hamstrung by insufficient resources for enforcement and too many loopholes,” remarked one panelist. The group emphasized the need for stronger implementation and broader policy measures to support MEES, alongside potential reform of the EPC system.
Two other areas of legislation were also mentioned. The Housing Health and Safety Rating System (legislated under the Housing Act 2004) and the Homes Fitness for Human Habitation Act 2018 both have benefits. However, panelists noted that these are both reactionary and depend on tenant complaints, and that cuts to enforcement teams and the difficulty of taking legal action also present further barriers.
Actions to Enhance Energy Performance in Private Rentals
Experts agree on the importance of immediate help like income and emergency heating support for tenants. However, they emphasize the necessity of long-term strategies to address fuel poverty and improve overall conditions and energy efficiency in private rental sector (PRS) homes. There’s a consensus on the need for PRS-specific energy policies, given the sector’s unique challenges. A comprehensive, system-wide approach involving multiple policy changes is recommended for effective results.
Proposed Policies and Measures:
- Proactive Regulation Enforcement: Increase funding and resources for local authorities to enforce housing standards more effectively. Enhance training and education for inspection teams to bridge skill gaps.
- Secure Tenancy Rights: Strengthen tenants’ ability to request home improvements. Consider rent controls linked to property conditions, incentivizing landlords to invest in energy efficiency while protecting tenants from steep rent hikes.
- Financial Incentives for Landlords: Implement tax incentives, VAT exemptions for insulation, grants, and low-interest loans to encourage landlords to enhance energy efficiency.
- In-depth Research: Conduct research to understand landlord behaviors, which will aid in designing effective policies and improving regulation compliance.
- Identifying At-Risk Households: Develop new methods to identify households that are most vulnerable to energy inefficiency.
- Consensual Dispute Resolution: Encourage non-confrontational dispute resolution between tenants and landlords, like the Residential Tenancies Board in Ireland and a proposed landlord ombudsman in the UK.
- National Housing Conversion Fund: Create a fund to enable the purchase of private rental properties by social landlords or community-led organizations for conversion into social housing.
- National Register of Landlords: Establish a register for quick identification and location of private rental properties and their owners, facilitating more efficient enforcement actions.
- Enhancing EPC Accuracy: Improve the reliability and detail of Energy Performance Certificates to enable better assessments of property conditions.
The Q&A session highlighted the intricate challenges within the private rental sector, and the need for multifaceted solutions. As the sector continues to evolve, the insights from this expert panel serve as a crucial resource for anyone involved in private renting, from policymakers to tenants and landlords. These discussions underscore the urgency of addressing the sector’s challenges through informed, collaborative efforts, paving the way for a more equitable and efficient private rental market.