During his speech to the House of Commons on 18 July 2024 Miliband linked EPC targets to reducing household energy bills, stating that meeting them would help to decrease fuel poverty, which currently affects 3.2 million people. The problem is particularly acute in the PRS, where one in four tenants live in fuel poverty.
Sector buy-in harmed by uncertainty
Constant change around energy efficiency measures has had a negative effect on the PRS for some time. In our August 2023 report, Energy efficiency in UK property: Where to go from here? we cited feedback from property agents that said the lack of communication and guidance from governments on energy efficiency regulations was the cause of confusion and stress across the sector.
That is why Propertymark welcomed Sunak’s decision to drop the targets in September 2023, as it offered some relief to hard-pressed landlords worried by the potential investment, at a time when budgets are squeezed for everyone.
New homes to boost progress to net zero
The UK Government’s detailed proposals for the 2025 Future Homes and Buildings Standards will amend existing legislation to set new minimum energy efficiency requirements for buildings in England. Most changes will apply to new homes and non-domestic buildings and should ensure no further work will be needed for new buildings to produce zero carbon emissions as the electricity grid decarbonises.
Support must be in place alongside targets
Propertymark wants to see more energy-efficient homes, but, as we have long said, the rules and requirements must be realistic and achievable for the sector.
A poll conducted in February 2024 revealed that financing energy efficiency improvements was a key reason why owners have not upgraded their property’s energy efficiency, with over 35% of people stating they couldn't afford the upfront cost.
Any future targets must be fully backed by legislation that incentivises and encourages people rather than penalising them.
Retrofit take-up is improving but should the UK be doing more?
The Department for Energy Security and Net Zero (DESNZ) reports applications to the Boiler Upgrade Scheme were 49% higher in December 2023 compared to the same month in 2022, but without mandatory targets, there is little sign yet that energy-efficient homes in the UK command higher prices.
Boiler Upgrade Scheme
The Scheme was launched on 1 April 2022, and from then until the end of December 2023, just over 19,000 installations were completed, with 57% of those being properties in rural areas. Nearly 20% of grants have gone to properties with no previous heating system.
After evidence given by Propertymark and others that the available funding was inadequate compared to the overall costs of retrofitting, the grant provided by the Scheme was increased in September 2023 from £5,000 to £7,500.
Our member feedback shows that the current level of support provided by the UK Government does not meet the costs of installing low-carbon heating systems, meaning that few agents and their customers are willing to engage with support programmes.
