Landlords drastically improving energy efficiency, as number of worst rated properties halves

A new study has revealed that the private rental sector has seen a rapid improvement in energy efficiency over the past two years.

The study, carried out on behalf of AXA, found that the number of worst-rated properties has halved.

The study also found that rental properties were more likely to have boiler upgrades, insulation and smart meters than owner-occupied homes.

However, whilst the overall news was good, the survey still found that one in twenty rentals breach minimum standards set to come into force next April, resulting in tenants over-paying on energy by an estimated £13 million every month.  AXA warned the sector that non-compliant properties falling into the ‘F’ and ‘G’ categories pose an ‘excess cold hazard’ to residents and more than 200,000 homes are now at risk of being banned from the private rental market next April when minimum standards come into force.

Energy performance is important to tenants

Landlords keen to snare the best tenants should not underestimate the importance of energy efficiency – cold and damp were named the biggest bugbears by 43 per cent of those surveyed.

A quarter of tenants said they felt they were paying excess bills due to the energy inefficiency of their homes – and the survey found that the average monthly bill in a Band A rental is £61 per month, increasing to  £112 in Bands F to G.

Scottish tenants enjoy more energy efficient properties

The research saw Scottish tenants reporting the highest energy efficiency levels in the UK. Eighty three per cent of rentals have double glazing, 76 per cent – roof insulation, 73 per cent –modern boilers, and 15 per cent have wood-burning stoves (double the average elsewhere in the UK).

AXA advises landlords running properties in the worst-rated bands to consider upgrading their properties as a matter of urgency. While those in Bands F and G will be forced from the market next year, those in Band E may well join them over the coming years following last week’s recommendations to Government by Frontier Economics.

Help is on offer to landlords under schemes like the Green Deal, while tenants on low incomes can access support from the Affordable Warmth Obligation.

“Our study has found that landlords are making significant investments into improving the energy efficiency of their properties. And this is part of a bigger trend: when we look at our surveys of tenants and landlords over the past five years, we see progress across the board – on security, maintenance and numbers with proper tenancy agreements in place. Many landlords we speak to are ‘accidentals’, who typically own one or two properties. They are, by and large, professionalising and investing more seriously in their tenants’ comfort and the future health of their rental properties. Pockets of failure exist in this market, but it is not the story for the 95 per cent of landlords who are trying to do the right thing.” 

Gareth Howell, Managing Director, AXA Direct

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