The issue of home ownership is back in the news at the moment in the UK in the run up to the general election. Politicians are outlining their plans to deal with a lack of affordable homes against increasing demand. Like nearly 5 million other families in the UK, my family and I privately rent our home having never been in a position to buy property, something that remains a dream for many in the post financial crisis and sub-prime lending economy. In fact recent evidence suggests that many young families are giving up on the dream of owning a home altogether. As a result the size of the rental sector is increasingly rapidly which brings with it a number of issues, but one which is rarely acknowledged is the fact that privately rented homes have the worst energy efficiency performance of all housing tenures. In this post I discuss this in relation to a new study we recently published in the journal Energy Policy which examines the attitudes of private sector landlords to energy efficiency in their tenanted homes.
The dream of home ownership for many is now nothing more than that – just a dream. Increasing house prices coupled with many years without real-terms wage increases and ever more stringent criteria from lenders have resulted in a large increase in the number of families renting properties from private sector landlords. Privately rented housing stock has almost doubled in the UK over the last decade meaning that from 2005 for the first time since the 1960’s, there was more private rented housing than local authority council housing. There are many issues that this shift raises as it is widely acknowledged that rather than being a legitimate alternative to home ownership, renting is generally more expensive, insecure and properties are often of poor quality. Linked with the issue of housing quality is the problem of energy efficiency and performance.
Our study surveyed private sector landlords predominantly in the North of England with the aim of gaining an understanding of the attitudes and behaviours of private sector landlords with regards to the energy efficiency of their tenanted homes. Whilst the results cannot be said to be representative of the sector as a whole they do pose some important questions.
Poorly performing homes
Private rented homes have the worst energy efficiency performance of all housing types in the UK. A similar picture can be found and across much of Europe, Australia and North America. The result is that the housing sector which is the fastest growing, is also the most energy inefficient.
Private rented homes have the worst energy efficiency performance of all housing types…
This is important for a number of reasons. Firstly the UK’s housing stock generates approximately 27% of the country’s total annual carbon emissions through space and water heating, alongside demand for supplied electricity. Since the private rented sector includes some of the worst performing homes in terms of energy performance, improving this stock will be key to assisting the UK government in achieving its legally binding target to reduce carbon emissions by at least 80% by 2050. The issues are not confined to carbon mitigation. The cost of energy is an issue increasingly gaining attention as more and more households struggle to meet rising energy costs and thus adequately warm (or cool) their homes.
Worryingly our study found that knowledge relating to energy efficiency and the impact of housing on the environment was rather low amongst private sector landlords. The majority perceived the energy efficiency of their stock to be ‘Good’ despite evidence that this is not in general the case. Respondents also failed to understand the influence household energy efficiency has upon the UK’s carbon emissions with the majority believing that the influence was minor.
Poorly implemented solutions
We asked respondents to report on what level of efficiency improvements they had made to their tenanted homes. Whilst the majority had made minor improvements (under £100 of investment), 28% of respondents had made no improvements to their tenanted houses and had no intention to in the near future. The primary reason given or choosing not to improve the efficiency of their tenanted stock was the high up-front costs associated with doing so.
The majority of landlords simply do not view that there is any benefit from undertaking energy efficiency measures as it is the tenant, not the landlord, who pays the energy bills in most cases.
Whilst this view is clearly not representative of all private sector landlords, they, along with the responses from the survey, illustrate an honest, perhaps apathetic attitude towards household energy efficiency that must be addressed in order to improve the energy performance of privately rented homes
Whilst tenants may ‘reasonably request’ that their homes undergo energy efficiency interventions such as double glazing or improved insulation there is no compulsion for landlords to do so. Should a tenant be unhappy, a landlord can simply end the tenancy and install new tenants.
Why is this the case?
There are perhaps many reasons why the private landlords are not fully engaged with the issue of the energy efficiency of their properties, but perhaps the primary hurdle is the fragmentation of the sector with this and other research finding that the majority of private sector landlords own only one property and do not view themselves as professional landlords. This results in a disparate collection of individuals managing a wide range of properties that collectively contribute significantly to the UK’s carbon footprint.
Another issue is that policy measures designed to improve the energy efficiency and performance of housing have proved ineffective in the private rented sector. A total of 67% of survey respondents stated they had never made use of any government schemes to improve the energy efficiency of their tenanted homes. Previous energy efficiency schemes such as Warm Zone have resulted in modest improvements where tenants have been able to install measures but this has been reliant on the landlords’ willingness to allow interventions to take place. The current energy efficiency policy mechanism is the Green Deal, however this is aimed primarily at owner-occupiers and the awareness of its application in the private rented sector at the time of the study was low with almost half of respondents never having heard of the scheme.
What can be done?
The study concludes that there are a number of areas where work is required if privately rented homes are to become more energy-efficient.
Firstly, there is a need for a unifying body that represents all private sector landlords with whom policy makers could engage with to increase awareness and design policy interventions. This could perhaps be achieved through mandating private sector landlords’ membership of the National Landlord Association (or similar).
Second, the primary reason given by respondents for choosing not to improve the efficiency of their tenanted stock was the high up-front costs associated with doing so. Here there needs to be a policy instrument aimed specifically at the private landlord sector that incentivises, or better still mandates energy efficiency improvements to private rented properties.
Third, there is a need for greater and clearer powers for tenants to request such improvements and mechanisms to ensure that landlords follow this through without prejudice.
The full published version of this research can be accessed here and should be cited as: Hope, A. J., & Booth, A. (2014). Attitudes and behaviours of private sector landlords towards the energy efficiency of tenanted homes. Energy Policy, 75(0), 369–378.