£5 Billion Economic Gain if Private Landlords Encouraged to Fully Retrofit
Bristol, September. 6th, 2023. A recent analysis of Energy Performance Certificate (EPC) data conducted by Propflo, a decarbonisation platform for lenders, reveals that the UK economy stands to benefit by a minimum of £28 billion at a cost of £23 billion – resulting in a net gain of £5 billion – if privately rented properties below an energy rating of C undergo complete retrofitting with all recommended improvements.
However, should landlords choose to undertake only the minimum work to comply with the proposed Minimum Energy Efficiency Standards (MEES), the economic gain would be £8.7 billion against costs of £13.9 billion, translating to a net economic cost of £5.2 billion. This emphasises the importance of supporting and incentivising landlords to surpass the minimum requirements in order to fully unlock a property’s energy efficiency potential.
The analysis of EPC data includes calculations of costs and lifetime energy savings. This assessment, however, does not account for additional benefits such as enhanced property value, mortgage and tax savings, job creation, and improvements in energy security, health, and overall well-being.
While a significant majority of privately rented properties below a C would need spending close to or at the £10,000 cap (over 80%), 2% of properties would only require an average expenditure of £311 to achieve compliance, while another 6.2% would require an investment of £1,514 per property.
The analysis also demonstrates that 81% of properties within scope have at least one low-cost energy efficiency improvement recommendation, including energy-efficient lighting or loft insulation, and approximately 0.2% of properties only require a single low-cost improvement to attain a grade C rating.
Furthermore, approximately 0.6% of properties may be eligible for exemptions based on high costs or third-party consent, and 7.7% are within the scope of the wall insulation exemption (subject to expert advice confirming that the work would not negatively impact the building’s structure).
This analysis comes as the deadline for meeting new MEES regulations – expected to be announced later this year – could be relaxed.
Propflo is an award winning AI platform that supports lenders and property businesses to comply with energy efficiency regulations, meet their climate targets, and then support their customers in their wider ownership journey.
It was founded by proptech entrepreneur Luke Loveridge and geospatial and risk data scientist Dr Daniel Moyo. Its lead investor, Ying Tan, is an industry expert having built and sold one of the largest specialist mortgage brokers in the country, and is now CEO of leading digital broker – Habito. The business has a strong advisory team including the CEO of Yopa Verona Frankish, and Professor Mike Tipping who is a world-leading AI expert.