EPC Ratings - rental sector won't improve without grants, warns legal expert

A legal expert says there is too little practical help available to transform the energy efficiency reputation of the private rental sector.

Gina Peters, Head of Landlord and Tenant at Dutton Gregory Solicitors, says helpful initiatives such as The Green Deal and The Green Homes Grant ended in 2015 and 2021 respectively - and without those, the private rental sector has little incentive to improve.

She says that the introduction of Minimum Energy Efficiency Standards meant that from April 2018 landlords could no longer rent their property, unless exempt, if it had an EPC below ‘E’. In a further drive of making properties more energy efficient, the government said that by 2025, this will now apply to any properties lower than a ‘C’.

Peters says the government’s Energy Company Obligation Grant was launched in 2013 and is on its fourth scheme ‘ECO4’ which started in July 2022 and is set to run until 2026. 

The grant allows funding for a range of eco-focused improvements to help upgrade heating and install insulation into homes. This can include cavity wall insulation, internal wall insulation, loft insulation, electric storage heating, and central heating. The intention is on suppliers of fuel to help those in fuel poverty and in vulnerable households to heat their homes. 

But critically, says Peters, eligibility for the grant only applies to the tenant rather than the landlord. 

The tenant needs to meet certain household income criteria, or have claimed benefits in the last 18 months. 

That means even if the landlord is keen to carry out the works, they are reliant on their tenant’s eligibility rather than their own. If the ECO Flex Central Heating Grant criteria is met, it may be possible for a determined landlord to apply for this grant based on their tenant’s low income and vulnerability to living in a cold home. 

Peters comments: “For landlords with EPC E, F or G rental properties, there might be help available. However, the hurdles to jump in order to unlock the funding are too prohibitive, and it is largely dependent on the circumstances of the tenant living in the property, rather than the landlord who owns it. A widespread effort to reduce the carbon footprint of the UK’s privately rented homes is certainly not going to be achieved by this unnecessarily complicated grant that hardly anyone is aware of.

“Moreover, grants that are issued go to the tenant rather than the landlord, so the only authorisation the property owner has with the grant application is to approve the works. The submission process might be able to be completed on behalf of the tenant, however stringent criteria relating to the tenant’s personal circumstances is still required.

“The issue the landlords we represent are finding, is that there is no grant specifically available for rental properties, that can be applied for solely based on the current energy performance of the actual home. So, gaps between tenancies – when landlords may naturally wish to carry out disruptive internal works – would instantly forfeit any potential grant subsidy. 

“With more and more people seeking a rental home within a property asset class pool, that is literally shrinking by the day, private landlords need to be helped and incentivised directly, otherwise we will continue to see more and more former rental homes sold, and the prospect of an alarming rise in homelessness. If the Government is serious about improving the energy efficiency of the UK’s rental stock, a much more widespread helpful grant needs to urgently be created to appeal to landlords. Or, like many in the industry have suggested, the Secretary of State could introduce interest free loans, or lower stamp duty thresholds on properties in need of significant energy performance upgrades.

“It is all well and good hearing sustainability rhetoric, but in a socio-economic and housing crisis, support needs to be much more readily available to turn a worrying tide.”