Two-year energy efficiency delay could cost tenants £1bn

The government’s two-year delay in confirming new energy efficiency standards for private rented households could cost tenants £1 billion in higher bills, new figures show.

In early 2021, the government consulted on proposals to increase the Minimum Energy Efficiency Standards for new private sector tenancies to Energy Performance Certificate (EPC) Band C by 2025 in England. The same Band C standard would apply to all tenancies from 2028 under the government’s proposals.

However, the government has yet to outline its next steps following this consultation, which concluded two years ago.

New analysis from the Energy and Climate Intelligence Unit (ECIU) has found that a two-year delay to implementing these proposals could leave tenants living in the 2.4 million privately rented homes that currently fall below EPC Band C more than £1 billion out of pocket.

This would be the additional sums tenants living in sub-Band C privately rented homes would have to pay in a “medium gas price scenario”, under which the fuel falls in price from 8p/kWh in 2025 to 6p/kWh in 2029.

If all privately rented homes met EPC Band C in 2025 rather than 2028, private renters could save nearly £11 billion by 2050, according to the ECIU. This figure could increase by a further £3 billion in the event of a repeat of the current gas price crisis, it says.

The ECIU’s analysis also shows that private tenants are likely to receive a disproportionately large share of payments from the government’s Energy Price Guarantee because of the poorer energy efficiency of homes in the sector.

Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit, said: “Questions are being asked about why something as simple as confirming a new standard is taking this long, when it could save households cash and generate growth at a time when UK growth is at best sluggish – and the government will certainly be under pressure from landlords and tenants alike as they seek clarity.”

More than half (56%) of privately rented homes fall below EPC band C, much higher than the socially rented sector (31%), according to the government’s own English House Condition Survey.

Private tenants are also more likely to be non-white and around a third (30%) have one or more household members with a long-term illness or disability, the same survey shows.