In a recent study conducted by British Gas, alarming findings indicate that an overwhelming 66% of privately rented homes are in dire need of urgent energy efficiency improvements. This pressing issue underscores a crucial gap in the rental property sector, calling for both financial support and expert guidance for landlords to make informed decisions aimed at boosting Energy Performance Certificate (EPC) ratings.

The report sheds light on a noteworthy contradiction within the landlord community. While a substantial 81% of landlords acknowledge the need for improvements to make their properties more environmentally friendly, a mere 23% express a readiness to implement these essential changes. This disparity emphasizes the urgent requirement for comprehensive support mechanisms, including financial assistance and expert advice, to bridge the gap between awareness and action in enhancing the energy efficiency of privately rented homes.

The private rental sector, constituting approximately 19% of all UK households with around 4.6 million units, lags in adopting low carbon heating solutions compared to owner-occupied and social rented sectors. British Gas highlights a significant need, estimating that nearly two-thirds of privately rented homes necessitate energy efficiency enhancements such as low-carbon heating and smart technology installations.

According to the report, 56% of landlords express concern about the environment, perceiving insufficient action from the UK government and the public regarding climate change. Despite this awareness, landlords remain skeptical about the potential benefits of environmental improvements for their properties and rental values.

British Gas sheds light on a prevalent challenge facing landlords in enhancing their properties—an evident lack of awareness regarding Energy Performance Certificate (EPC) standards. Astonishingly, 44% of respondents confess to being unfamiliar with their property’s EPC rating, despite the mandate for a rating of E or higher in place since April 2020.

Delving deeper, a substantial two-thirds of those surveyed exhibit a deficiency in understanding or an overestimation of the average cost involved in elevating a property to the coveted EPC C standard. This standard, previously a target before policy adjustments in September 2023, is estimated to require an investment of £7,430. Additionally, a notable void in knowledge surrounds available grants, with 52% acknowledging a lack of awareness about potential financial support and incentives for energy-efficient improvements.

Gail Parker, the director of low carbon homes at British Gas, highlights a significant challenge faced by landlords—their willingness to enhance energy efficiency, hindered by a lack of knowledge and financial support. Parker emphasizes the need for collaboration between the government and the industry to facilitate landlords in making affordable and straightforward changes for increased energy efficiency. The call is for a concerted effort to address this issue, ensuring energy-efficient homes benefit everyone, not just property owners.

Another obstacle in landlords upgrading their properties stems from a misunderstanding of tenant preferences. Despite nearly half of tenants deeming green practices essential in property selection, landlords perceive these improvements as unattractive. Surprisingly, only 30% of landlords have received requests for green technology from tenants. However, when such requests are made, the majority—61%—of landlords are responsive, implementing installations as a direct result.

Furthermore, the majority of landlords believe that the financial burden for environmental improvements should rest solely on them or be a joint responsibility shared between the landlord and the government. They don’t consider it the tenant’s responsibility.

In response to the findings, British Gas is recommending to government that it should: 

• introduce a Green Upgrade Relief which allows landlords to deduct green improvements from their annual income
• introduce government-kitemarked loan terms for private lenders to offer low and no interest loans partially funded by the UK Infrastructure Bank;
• launch a one-stop shop for advice and guidance service from Energy Saving Trust modelled upon Scotland’s Home Energy service, something British Gas and Barclays have started by launching a series of free events to help Plymouth residents explore how to make their homes more energy efficient;
• start the data-gathering process to implement Building Passports for individual properties;
• update the Renters Reform Bill so landlords cannot reasonably refuse smart meter installation, to strengthen renters’ rights and awareness of rights.

Gail Parker from British Gas emphasizes the importance of finding tailored solutions for each home to enhance energy efficiency, reducing emissions and aiding customers in cutting costs. Landlords can utilize the home health check tool to identify ways to improve their property’s efficiency, providing them with the necessary insights before implementing any green changes.

Parker notes the recent government grant update, elevating support for heat pumps from £5,000 to £7,500 in England, making home upgrades more accessible. British Gas offers a competitive heat pump package, ensuring efficient heating comparable to a gas boiler. Additionally, the company introduced a suite of Net Zero services this year, spanning solar solutions, insulation, home energy efficiency, and electric vehicle charging, further supporting customers in their sustainable endeavors.

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