Having reported on Energy Performance Certificates (EPC’s) and the Green Deal in previous blogs we thought we should comment on what impact this has for tenants of private rented property.
In May 2012 The Royal Institute of Chartered Surveyors (RICS) released research on energy consumption in the home – The changing effects on domestic energy expenditure from housing characteristics and the recent rapid energy price movements. This follows implementation of legislation obliging all property vendors and landlords to have an Energy Performance Certificate (EPC) issued for their property and the government’s impending Green Deal.
What the report showed was that the majority of private rented property tenants are paying rather more for their energy than owner occupiers. Private tenants paid on average an extra £31 per year than owner occupiers. Tenants in council housing were the best off with savings of nearly £60 per year compared to owner occupiers.
These savings are being seen as a result of owner occupiers and social housing landlords taking a longer-term view of insulating property and modernising heating systems, which in turn will reduce energy consumption and bills.
The RICS report, states that the single most significant factor in these higher bills is electric heating which can result in bills of between £196-£898 more per year than homes with gas central heating
Jeremy Blackburn, RICS Head of UK Policy, said “Those renting privately should expect the same standards in insulation and heating as homeowners and those in social housing. More needs to be done to ensure private rental property is fit for purpose and energy efficient. It is important that the Green Deal effectively addresses this at a time when tenants across the country are struggling with high fuel bills and increasing rents”.
The EPC allows tenants to see at a glance how energy efficient their new home will be when they are searching for property.
Click on the image to find out more about EPC’s
Tenants are more likely to choose properties with a more favourable energy rating, where other factors are equal, and so landlords with properties that are not energy efficient will start to notice void periods between tenancies as they become less desirable in the marketplace. As Bruce Marshall of Riley Marshall explains “While it is likely that further government legislation will come into force to oblige landlords to improve the energy efficiency of their property, market forces will soon begin to apply pressure”.
Riley Marshall 