Citizens Advice response to the BEIS consultation on minimum energy efficiency standards in the private rented sector
Citizens Advice welcomes the government’s proposal to make the minimum energy efficiency standards for rented homes more effective. We also agree that Green Deal and other relevant funding sources are likely to do little to improve energy efficiency in the private rented sector. It is the right approach to require landlords of substandard properties to contribute to the cost of energy efficiency measures to improve these homes.
However, the regulation will be more effective if the cost cap is set at £5,000 rather than £2,500. The regulation is designed to help renters facing high fuel bills and contribute to meeting fuel poverty targets. A £5,000 cost cap is around twice as effective in achieving these aims as the £2,500 cost cap, according to BEIS’s impact assessment. Further, the impact assessment underestimates the relative cost-benefit of the £5,000 cost cap, notably by not including the health impacts.
Citizens Advice recognises the need to balance the impact of the regulation with any adverse impact on the housing market. Last year we published research into the impact of introducing a minimum standard. This supports the government’s argument that there is likely little impact on rental price or the supply of housing.
If the cap is set at £2,500 there will be significant gap in the funding required to meet the government’s fuel poverty targets. There is no mention of these extra costs in the proposals. The government has set out an aim to further increase standards in the private rented sector, up to Band C by 2030. It is unclear how this can be achieved with a £2,500 cost cap that leaves a large proportion of tenants in cold F and G rated homes.
This regulation provides an opportunity to significantly boost to the living standards of tenants in the coldest homes. It will bring a significant benefit to tenants, by reducing their energy costs, and because the impacts on the rental market will be limited. If the cost cap is set at £2,500 this opportunity will be missed.