Private rented sector and energy efficiency

What’s driving the energy efficiency agenda?

To meet the UK’s legally binding net zero target by 2050, we must decarbonise our housing stock, which currently accounts for about 20% of the country’s carbon emissions. Achieving this requires a significant investment—around £250 billion over the next 26 years, with £38 billion specifically needed for the private rented sector. Currently, 2.6 million private rented homes fall below a C energy rating, giving a sense of the scale of the challenge.

However, we are far from reaching our retrofit targets. While we need 80,000 retrofits per month, the current pace is just 17,000 per month, highlighting the need for urgent action.

Government initiatives: warmer homes and green energy

The Labour government has made energy efficiency one of its top five priorities under the banner of making the UK a “green energy superpower.” As part of this mission, the government has pledged an additional £6.6 billion to upgrade 5 million homes during this parliament, with the funding likely delivered via grants and low-interest loans through regional and local authorities.

Despite this, government funding alone will not cover the entire cost. The private sector, including banks, will also be called upon to help finance the remaining 20 million homes that need energy efficiency improvements.

Minimum Energy Efficiency Standards: what landlords need to know

Before last year’s policy shift, the target for improving energy efficiency in the private rented sector was set for 2028, with a cap of £10,000 for landlords to spend on upgrades. There were several exemptions, including cases where all improvements had been made or for high-cost retrofits like external wall insulation. Failure to comply would result in heavy fines for landlords.

However, most properties below a C rating—around 74%—would require more than £10,000 to achieve the necessary improvements. Solar panels emerged as one of the simplest solutions to meet the standards, with less disruption and a clear return on investment.

Key changes and new deadlines

Recent announcements have extended the deadline for landlords to upgrade properties to 2030. Notably, the regulations will now include social housing, bringing an additional 1.2 million properties into scope. This could have a significant impact on the supply chain as the deadline approaches.

Additionally, upcoming changes to EPC assessments will make them more accurate, though they may take longer and cost more. These new assessments are expected to favour heat pumps and prioritise renewable energy solutions, while reducing the focus on carbon-intensive heating systems like gas boilers.

The link between home health and energy efficiency is becoming more apparent, especially with the expansion of Awaab’s Law into the private rented sector. This will increase scrutiny on issues such as excess heat, cold, and mould risk. Technologies originally developed for social housing may soon be adopted in the private rented sector to help landlords manage these risks.

Propflo is here to support homeowners and landlords in navigating these changes and ensuring that their properties meet future energy efficiency requirements.

For further insights and advice, please reach out via contact@propflo.co.uk to get a quote.