Private Rented Sector Summary

The private rented sector has some of the worst housing in the UK in terms of energy efficiency. Over 3 million homes across the UK are owned by private landlords. This represents a significant proportion of the UK’s managed housing stock (20% in Scotland, 40% in England and Wales and over 50% in Northern Ireland), and accounts for over 10% of the total UK housing stock.

There are significant clusters of private rented housing in major cities and university towns. Whilst the buoyant buy-to-let market in recent years has often focused on new build flats, much of the housing in the private rented sector is defined as "hard to treat", that is, it is not suited to mainstream energy efficiency measures and is therefore more difficult and expensive to improve.

The nature of the stock is not the only challenge facing the private rented sector in improving its energy performance. Many landlords see energy efficiency as a cost to them, the benefits of which - a warmer home with lower fuel bills - accrue to their tenants. It is hard to recover their investment and unlike social rented sectors, there are not any strong Government regulations ensuring that improvements are made. There is therefore little incentive for landlords to install energy saving measures in their properties.
 
Private landlords vary from large commercial organisations through to those with only one property that is rented out as a side line. This also adds to the difficulty of engaging private landlords on energy efficiency and fuel poverty issues.

The Private Rented Sector Sub-Group is addressing these challenges by investigating and supporting ways of encouraging private landlords to invest in energy efficiency improvements. This might be through fiscal incentives or through increased awareness of the opportunities that action on energy offer to landlords. The Group brings together all the UK’s leading landlords associations, along with Government and other energy efficiency bodies.

Trends affecting this sector include:

• Increased regulation of private landlords with the introduction of HMO licensing and tenancy deposit protection as well as further fire safety legislation.
• The new Housing Health and Safety Rating Scheme giving local authorities additional powers to demand improvements in private rented housing where a risk from excess cold is detected.
• The Landlords Energy Saving Allowance (LESA)  - a tax incentive for private landlords to install insulation has been introduced by the Treasury but awareness and uptake remains low.
• Energy Performance Certificates (EPCs) will be introduced for rented homes from October 2008.
• There are a high number of ‘hard-to-treat’ homes in the sector that require attention.
• Thermal comfort is a major factor within the definition of Decent Homes and local housing authorities have targets to achieve for the reduction of Non-Decent Homes in the private sector. 
• Grant schemes can seem bureaucratic to private landlords as they depend on the status of the tenant, rather than on individual properties.

The Private Rented Sector Group’s achievements to date include influencing the range of measures included within the Landlords Energy Saving Allowance. In 2006, the Group launched "Reducing the Carbon Impact of Private Rented Housing", a statement outlining a joint position on a series of issues, which provides a platform for ongoing influencing and communications activities.

We also piloted a series of marketing activities aimed at raising awareness and overcoming the barriers to energy efficiency among private landlords. Successes included the piloting of an energy efficiency strategy service for large scale private landlords; the development of an Energy Efficiency Checklist for students seeking rented accommodation; provision of support to local authorities communicating energy efficiency to members of landlords networks/accreditation schemes; and the publication of energy efficiency information on fifteen specialist landlords websites and six landlords magazines. The Group also made presentations at five conferences for landlords.

You can find out more about the Private Rented Sector Sub-Group's activities by reading our workplan.