CIH calls for more support for local authorities to enforce PRS energy efficiency regulations

1. Do you agree with government’s preferred position of using new alternative Energy Performance Certificate (EPC) metrics following EPC reform as the basis for higher Minimum Energy Efficiency Standards (MEES) for privately rented homes?  

Yes, we agree. CIH supports the introduction of the government’s proposed fourfold EPC structure. 

2. Government would welcome views on options for setting future MEES against a combination of new EPC metrics. Do you agree with government’s preferred approach of having a requirement to meet a primary standard set against the fabric performance metric and then a secondary standard set against either the smart readiness metric or heating system metric, with landlord discretion on which secondary metric their property meets? 

We agree that the primary standard in the private rented sector should be set against a metric that prioritises improvements to fabric efficiency. 

This is because measures to improve fabric efficiency reduce the energy demand of a home, lowering its running costs. Prioritising fabric is therefore typically the best option for tackling fuel poverty and making progress towards the government’s statutory fuel poverty targets in the private rented sector. 

It is difficult to give a firm view at present on the secondary metrics because the outcome of the government’s consultation on EPC reform has not been announced. However, we recognise the importance of decarbonising private rented homes, and support the introduction of a regulatory framework for energy efficiency that can, either immediately or in the future, incentivise the installation of low-carbon heating and smart technologies. 

The government should consider how to ensure that introducing landlord discretion does not lead to the installation of secondary measures that have a limited impact on reducing running costs. For example, depending on the outcome of the government’s EPC reform consultation, the installation of storage heaters could meet a minimum standard on the heating system metric but might not be the most appropriate way to reduce fuel poverty. Wherever possible, the regulatory framework should prioritise primary and secondary measures that have the greatest impact on energy bill reduction. 

Finally, government should consider how to reflect the needs and circumstances of tenants in the regulations. At some level, tenants should have a say in the measures that are installed in their homes, and measures should meet the specific needs of existing tenants as far as is possible. 

3. What are your views on the alternative approaches of: Alternative 1: A requirement to meet a standard set against dual metrics of equal weighting. The standard would be set against dual metrics including two of the following: fabric performance, heating system and smart readiness. Alternative 2: A requirement to meet an overarching standard set against all three metrics of fabric performance, heating system, and smart readiness, either through improvements across all standards or through landlords concentrating improvements against one or two standards. 

We think that the government’s minded approach to prioritise fabric in the private rented sector is correct. 

5. Do you agree with government’s proposal to increase the maximum required investment for Private Rented Sector (PRS) MEES to £15,000 per property and for landlords to be able to register an exemption if expenditure would take them over this figure? If not, please set out whether you consider a cap should apply and how; and if so, what level you consider the cap should be set at and why (whether this is the 2020 proposal of £10,000 or another figure). Please explain your answer. 

At present, we cannot provide an evidence based view on what the precise cost cap should be. 

However, we strongly agree with the government’s intention to significantly increase the cost cap from the current level of a maximum of £3,500 per property. This will be clearly insufficient to meet a higher energy efficiency standard. 

7. Do you agree with government’s preferred implementation timeline to require ‘new tenancies’ to meet the higher standard from 2028 and ‘all tenancies’ to meet the higher standard by 2030? If not, do you have alternative suggestions? 

Broadly, we agree. 

Government should consider how this proposal could affect different types of private landlord. CIH has members who work in assets and sustainability teams for large for-profit private landlords that nonetheless let their homes at social rent and affordable rent rates. These landlords are, in important respects, privately owned social landlords, and many have voluntarily signed up to be regulated by the Regulator of Social Housing. In addition, these landlords have similar approaches to asset management, planned improvement, and retrofit as social landlords, and have pre-existing targets to reach EPC Band C across all or most of their homes by 2030. 

We propose that what we have termed ‘privately owned social landlords’, renting their homes at social and affordable rent, could be exempt from the requirement to meet the higher standard for new tenancies from 2028. This will ensure that their current retrofit and planned improvement plans to improve their homes to EPC Band C (or equivalent) by 2030 can continue. In legislation, this exemption could be conferred on private landlords that are fully registered with the Regulator of Social Housing and meeting its regulatory requirements. 

9. Do you agree properties that have an EPC rating of C against the EER on EPCs before 2026 should be recognised as compliant with the future standard until their EPC expires or is replaced?  

We agree. 

As a cross-tenure professional body, CIH would emphasise the importance of this measure for the social rented sector as well as the private rented sector. Social landlords have made significant progress in improving the energy efficiency of their homes; the proportion of social rented homes at EPC Band C or above has risen from approximately 24 per cent in 2010 to 76 per cent in 2024. Thousands more social homes are likely to be upgraded to current EPC Band C before 2026 as a result of the work social housing providers are undertaking, including that funded through the government’s Warm Homes: Social Housing Fund. The government’s proposed transitional arrangements will be important for ensuring that this important investment towards statutory fuel poverty targets continues. 

If the government wished to accelerate the transition to its new EPC regime, alternative ways of recognising early investment could be considered. For example, government could consider if previous investment made to reach EPC Band C before 2026 could be counted towards the new cost cap. 

10. Do you agree with government’s proposal to require landlords to commission a new EPC before taking action to comply with higher MEES?  

We agree. 

10.1. Should the cost of this new EPC be included within the cost cap?  

No. Commissioning EPCs is already a day-to-day cost for private landlord businesses, and including EPCs within the cost cap would reduce the amount of funding that can be used to improve the energy performance of the home. 

10.2. Should landlords still be required to commission post-improvement EPCs? If yes, should the cost of the post-improvement EPC also be included within the cost cap? 

Yes, landlords should be required to commission post-improvement EPCs. Post-improvement EPCs are vital for helping tenants to understand the likely energy bills for their current or prospective home. They are also vital for government policy and statistics, and measuring progress towards fuel poverty targets. 

We disagree that the cost of the post-improvement EPC should be included within the cost cap, for the same reason we have set out in our response to Q10.1. 

To support landlords with the cost of pre- and post-improvement EPCs, government should consider requiring assessors to discount the cost of the post-improvement EPC.

12. Should government apply the PRS MEES Regulations to short-term lets? Please explain your answer. 

Yes. We agree with the government’s reasoning in the consultation document. It is particularly important that incentives are not created for private landlords to change private rented properties to short-term lets. This could increase levels of homelessness and place additional pressure on the already stretched homelessness duties of local authorities, especially in areas with shortages of social rented housing and temporary accommodation. 

17. Is there any additional information or evidence you would like to provide on either the effectiveness of the existing PRS regulations 2015 and guidance, or interactions with other policies?

We would like to add six additional points. 

Enforcement

As the professional body for people who work in housing, CIH has many members working in local authority housing departments. Members have expressed concerns that without adequate funding, it will be very challenging to enforce these new standards. CIH strongly welcomes the action the new government has taken to put local authority finances on a more stable footing, but this is unlikely to be sufficient to ensure enforcement of the regulations can be properly resourced. 

The government must ensure that local authorities are provided with the long-term, ring-fenced funding they require to enforce the new standards. This will enable local authorities to undertake proactive enforcement of the standards, which will discourage non-compliance. 

More generally, we support the proposals of other charities, consumer groups, and climate groups to increase enforcement and compliance actions, such as those proposed by E3G and the National Retrofit Hub. 

Skills and the supply chain

If minimum energy efficiency standards are introduced in both rented sectors with a compliance target of 2030, this will place pressure on the supply chain for retrofit. The wider construction sector is facing acute and ongoing challenges due to Brexit and the Covid-19 pandemic, and construction sector capacity must be sufficient to cope with the demand placed on it by all building services and asset management work, not just retrofitting homes. 

We have also received feedback from CIH members that social landlords have experienced challenges securing maintenance and servicing contracts for renewable and low-carbon heating technologies, especially solar PV and heat pumps. These contracts cannot be fulfilled by the existing workforce (e.g. gas heating engineers without sufficient heat pump training) without upskilling. The market for maintenance and servicing will therefore need to grow considerably in the coming years if more installations of smart technologies and low-carbon heating are driven by the government’s proposed approach to regulation in the rented sectors. 

This evidence suggests that the government needs to ensure that the various supply chains for retrofit, servicing, and maintenance are supported to meet increased demand. To achieve this, we support the detailed recommendations made in the Chartered Institute of Building’s manifesto for the built environment, such as the creation of a holistic Green Skills Fund, actions to tackle late payment culture, and the use of geographical clustering to boost the construction workforce across the UK. 

Protections for renters

We share the view of other charities, consumer groups, and climate groups that the Renters’ Rights Bill could be strengthened to provide sufficient protection for renters. 

CIH members have raised concerns that without additional protections, private landlords may increase rents either pre- or post-improvements and present this as the only way they can afford to meet the standard. This is despite evidence suggesting that many landlords have the required capital to make improvements, or can borrow against the value of their home (especially in parts of the country with high house prices). If rent increases occur, more renters may be evicted due to non-payment, which could place additional pressure on already stretched local authority homelessness duties. 

Funding for landlords

There are clearly going to be circumstances where some private landlords will struggle to afford the cost of energy performance upgrades. This may be because they have limited access to capital or may struggle to borrow against the value of their home because of its low market value. 

This latter barrier may particularly be the case in parts of the country with persistently low house prices. Outside of London, some of the former housing market renewal pathfinder areas now have high proportions of private rented homes, and there are other large concentrations of private rented homes with depressed values in other areas of the country. 

The government should consider how a mixture of financial incentives, such as grants (e.g. through the Warm Homes: Local Grant scheme), tax incentives, and low/no interest loans could be utilised to support private landlords to make the necessary energy performance upgrades. These measures should be targeted at private landlords that might otherwise find it difficult to afford the cost of energy performance upgrades, to ensure that public money and incentives do not unnecessarily pay for work that landlords could afford to carry out themselves. 

Advice and support

CIH believes that energy advice for both tenants and landlords is crucial and should be seen as a more central part of improving energy performance in the private rented sector. 

The proposed approach to regulation implies that landlords and tenants will need to understand sometimes complex forms of smart technology and low-carbon heating. Landlords will need to select the appropriate measures from a wide market of possible products, and tenants will need to properly understand how to use these products if they are to access the energy bill savings and other benefits that they promise. Some tenants will also need to be supported with complex, disruptive retrofits, including instances where they may need to temporarily move out of the home to ensure intrusive works can be properly undertaken. 

The government should examine how to improve the provision of energy and retrofit advice for private landlords and tenants. This should include action to ensure private landlords are aware of the regulation and can meet their obligations by the proposed deadlines. It should also include the production of guidance for tenants. 

Consumer protection

Lastly, the government must ensure that all measures installed in privately rented homes are completed to a high standard by competent, qualified installers. Installations should be carried out in adherence to appropriate standards (e.g. MCS and, where necessary, PAS2035) with clear pathways for redress for both tenants and landlords. We welcome the government’s stated intention to reform the existing system of protections for consumers as part of its Warm Homes Plan. 

Visit the governments website for more information on the consultation.

For more information on our response please contact Matthew Scott, policy manager at matthew.scott@cih.org.