Home Property Khan warns London renters could face £166m in higher energy bills after government backtrack on energy efficiency measures

Khan warns London renters could face £166m in higher energy bills after government backtrack on energy efficiency measures

by LLP Finance Reporter
3rd Dec 23 1:24 pm

The Mayor of London, Sadiq Khan has warned that renters in the capital with draughty, leaky properties could be facing higher energy bills for years to come, after the Government abandoned plans to ensure private landlords to make homes more energy efficient.

Proposals to improve energy efficiency of homes in the rental sector were revealed in 2021, following a Government consultation. The initial timeline said all new tenancies must have an Energy Performance Certificate (EPC) rating of C or better by 2025 and existing tenancies should comply by 2028.

But these proposals were scrapped in September as part of the Prime Minister’s review of green policies, which included an overhaul of measures designed to meet net zero targets.

City Hall analysis of the Government-commissioned English Housing Survey has found 494,000 private rental properties currently have an EPC rating of band D or below in London. It is in theory unlawful for landlords to let their properties if they don’t meet the required minimum rating of E, though in practice, loopholes mean that these can still be rented out.

Combining analysis of the English Housing Survey with national data on energy consumption and current energy prices reveals that London rented homes rated D or lower cost an average of £337 a year extra to heat compared to homes rated C or above – an unwelcome extra expense when so many private tenants are facing increasing rents and the impact of the cost-of-living crisis. The Mayor is particularly concerned about the negative impacts this hike in energy bills could have on low-income and vulnerable Londoners, including the elderly.

Landlords can increase a property’s EPC rating by upgrading lighting, adding wall and loft insulation, investing in double or triple-glazed windows, installing a new boiler or simply signing up for a smart meter.

Recent research from the Social Market Foundation found private renters in England and Wales are on track to waste £1.1bn (£220 per household) on energy that leaks out of their walls and windows. Meanwhile, four-fifths of landlords favour raising the minimum energy efficiency standard on rental properties.

The Mayor of London, Sadiq Khan said: “The situation for many renters in London and across the country is increasingly bleak, with rents soaring and other costs increasing.

“A key thing ministers could have done is helped renters with energy efficiency. Scrapping plans for tougher standards is frankly shameful, and will just lead to even higher bills.

“Actively deciding to condemn thousands of renters to draughty, inefficient, expensive homes is letting down renters, and this is on top of delays to banning so-called ‘no fault evictions’.

“Ministers should give cities like London the powers to freeze rents, but also urgently reinstate plans to ensure every renter lives in an energy efficient home.”

Ben Twomey, Chief Executive of Generation Rent, said: “The Prime Minister’s cancellation of plans to raise minimum energy efficiency standards means that landlords now have no obligation to agree to any insulation works, even if they are funded by government grants.

“This reckless political choice is leaving more tenants suffering in cold and draughty homes that are damaging our health and draining our wallets.

“Tenants in draughty homes currently pay hundreds of pounds more per year than they would if their home was insulated properly. Our research shows that three in ten renters are discouraged from applying for grants because of the expectation that their landlord will refuse them.

“With rents through the roof and private tenants facing this premium on our energy bills, we share the Mayor of London’s call for the Government to stand by its old promises and demand that landlords improve poor quality homes.”

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