How to make a rental property more energy efficient30-08-2022 | Utilities
Cost of living crisis after cost of living crisis and constantly rising energy bills have made many landlords curious about how they can make their property more energy efficient. Energy bills have increased for around 22 million energy consumers – and they’re expected to go up again later this year when Ofgem announces the winter energy price cap. Renters will be hit especially hard as they are unable to carry out larger energy-efficiency home improvements, which can help to reduce energy costs. Landlords can support (and therefore retain) their tenants by installing energy-efficient home upgrades and offering advice.
This article will help you get your property up to the Minimum Energy Efficiency Standards so that both you and your tenant can reap the energy-efficient benefits.
Understanding and improving EPC ratings
Energy Performance Certificates (EPCs) can help both landlords and their tenants understand the energy performance of their property. This is a great starting point for identifying areas for improvement. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient). Having a good EPC rating can mean lower energy bills and a smaller home carbon footprint. Higher energy efficiency is very attractive to renters, who understandably don’t want to spend their hard-earned money on rising energy bills. A good rating is likely to make your property more popular with prospective tenants too.
Landlords are legally required to provide their tenants with a new EPC every ten years. Tenants should also be provided with a valid EPC when they move in. You can find it via the Energy Performance of Buildings Register (in England and Wales) or the Scottish EPC Register (in Scotland). Check to see if yours is in date. If you don’t have a valid EPC, you could face huge fines.
All rental properties in Great Britain are legally required to have an EPC with a minimum rating of “E”. These Minimum Energy Efficiency Standards apply to all new and existing tenancies. However, there have been new proposed requirements from both the UK and Scottish governments as part of an initiative to help reach net zero by 2050. Under these proposed requirements, all rental properties would need a rating of “C” or above by 2025.
In England and Wales, you’re required to spend up to £3,500 on the recommended improvements to reach the Minimum Energy Efficiency Standards. If the recommended improvements exceed £3,500, you can apply for high-cost exemption via the PRS Exemptions Register. You can use a combination of third party funding and self-funding to achieve these energy-efficient upgrades.
However, getting your property to a “C” or above can be tricky, especially if your property is very old. So how can landlords make their properties more energy efficient?
Improving the energy efficiency of your property
Once you’ve got an up-to-date EPC, take a look at the recommendations included. These will give you an idea of what you could do to improve your property’s energy efficiency.
However, if you’ve recently done this and you’re still struggling with the energy efficiency of your property, there are various things you could do.
- Use Simple Energy Advice’s energy efficiency calculator to find out how you can reduce your energy bills.
- Check which home energy grants you might be able to apply for.
- Take a “fabric first” approach. This approach involves maximising the performance of the materials that make up the building fabric itself (like walls, roofing, insulation, and windows) before considering things like installing solar panels.
- Install an energy efficient boiler and heating system. Many new boilers work by pulling hot air from outside the house to heat the inside, which cuts down dramatically on heating costs.
- Draught-proof gaps and cracks and install double glazing. Actions like this may not sound like they will have an energy impact, but they can help make sure heating is only needed in the very depths of winter.
- Put in new insulation. If your property ranks very badly on its EPC, it’s possible that your insulation isn’t doing its job. Consider options like solid wall, cavity wall or loft insulation.
- Upgrade to LED lighting. This may sound like a tiny change – and it is! But LED lighting is so much more efficient and better for both the environment and your wallet.
- Install a smart meter. This, of course, doesn’t actually change the way your home uses energy, but can help you and your tenants understand how their energy is being used. Having instant visibility of usage and price can help many people cut down on their electricity use.
- Consider installing renewable energy systems like solar panels or heat pumps. These may seem like drastic measures, but they’ll only increase your rental yield and the overall value of your property.
How can landlords help tenants save energy and money?
Helping your tenants to save both energy and money will do wonders for both parties in the long run, no matter who’s paying the bills. Take a look at our Advice Centre for information on how you can help yourself and your tenant.
If your tenants are struggling with their bills despite the upgrades you’ve made to the property’s energy rating, here are some resources to send their way:
- There are many local services, such as Citizens Advice, that can offer support
- If your tenant is based in England, recommend Simple Energy Advice. This site offers government endorsed advice that can help your tenants.
- Let them know that in 2022, every household in England, Scotland and Wales can receive a discount of £400 on energy bills from October, with further support for pensioners and the lowest income households.
What can I do if my tenants can’t afford their bills?
If tenants can’t afford to pay their energy bills, it’s possible they’ll fall into rental arrears. This can be incredibly frustrating for both the landlord and tenant, but it’s important to deal with it carefully, respectfully and legally.
If you use a letting agent, consider enlisting their help. They should know all the legal ins and outs of rental arrears. This means they’ll be able to help you deal with tenants falling behind on rent in a way that means all parties are protected.
If you manage the property yourself, however, then try to deal with the issue delicately. It probably wasn’t your tenant’s choice and is likely to be a sign that they’re struggling. See if you can find a compromise or put together a payment plan that helps out your tenant. If this doesn’t help, take a look at our advice article on rent arrears and landlord’s rights.
The best way to protect yourself against rental arrears, however, is to take out a Landlord Insurance policy. You can arrange a policy that will protect your income if a tenant falls into arrears. To find out more, contact us today. We can help give you a little peace of mind when it comes to protecting yourself, your tenant, and your property.
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