Improving the energy efficiency of socially rented homes in England

No.

First, we support the UK Government setting a minimum energy efficiency standard (MEES) for the social rented sector (SRS) for the first time at EPC C. Introducing this minimum standard will help reduce fuel poverty rates in the SRS, ensuring tenants benefit from warmer, more affordable to heat homes. 

We agree with the preferred approach to require landlords to meet the fabric energy performance metric in the first instance, before focusing on the secondary metrics. Focusing on fabric performance is the best way to reduce household energy demand and bills, key to tackling fuel poverty.

However, we don’t agree that landlords should be able to choose between the smart readiness metric and heating system metric. We recommend that only the heating system metric is available to meet a secondary standard.

We also stress the need for the UK Government to progress the new EPC framework as soon as possible to ensure there are no delays to implementing the new standards and provide clarity to landlords around what will be expected of them. 

Fabric performance and heating system .

As outlined in our response to question 1, we agree with the UK Government’s proposal to require landlords to meet a primary standard under the fabric metric in the first instance.

However, we recommend that only the heating system metric is available to meet a secondary standard, rather than landlords having a choice between the heating system metric and the smart readiness metric. This will be key to support a move away from fossil fuel heating towards low carbon heating systems necessary for achieving net zero. 

Yes.

We agree with the timelines proposed within the consultation. We stress, however, that the dates proposed are the latest that the standards should come into force and should not be subject to delay. Given the policy’s dependence on the new EPC framework, this should be taken forward as soon as possible. There also needs to be clarity and certainty around the timelines as soon as possible for the supply chain to be confident in scaling up to meet demand. 

It will also be imperative that enabling policies are in place well ahead of 2030 to ensure that landlords are fully supported to deliver on the new standards and to help them understand what’s required of them. 

To support tenants when their property is upgraded, access to a national advice service in England will be crucial to ensure that tenants are able to access post-installation support to help with operating and maintaining any newly installed low carbon technologies to avoid increasing their bills because they are unsure of how to operate their system properly. Post-installation support will also be highly impactful following the installation of any energy efficiency measures as tenants will likely need to implement behaviour changes to fully benefit from lower energy bills. 

Yes.

We agree with the proposal to introduce a time-limited exemption. This is particularly important for landlords with a high proportion of complex to decarbonise properties who will need additional time to plan and resource works. This should be accompanied by targeted support for landlords with these types of properties to ensure tenants in these homes aren’t left behind.

However, we don’t agree with the length of the proposed time limited spend exemption, as explained further in Question 9.

Set it at £15,000.

We think that the cost cap for the SRS should be set at £15,000 to align with what was proposed in the recent PRS MEES consultation. Otherwise, there’s a risk that tenants in the SRS are left behind, particularly those who live in the least energy efficient homes. Whilst we recognise that many social landlords are managing a range of competing housing priorities, action on climate change and fuel poverty must be treated as core priorities. Therefore, the UK Government must ensure that social landlords are adequately resourced to meet the standards.

We also recommend that measures that are funded via grants provided to tenants in fuel poverty aren’t included within the cost cap. For example, if a tenant was eligible for the Warm Homes: Social Housing Fund, then the landlord should not be able to include any of this funding within their contribution to the cost cap and would still be required to spend up to the cap on meeting the standard. This would maximise the improvements being installed in the social housing sector and support the policy’s stated aim of fuel poverty alleviation.

It’s important that grant funding based on tenant characteristics, such as being in fuel poverty or on a low income, isn’t a substitute for private investment from landlords.

To ensure the continued effectiveness of the new standards, we also recommend that the cost cap increases in line with inflation. 

No.

We disagree with the UK Government’s proposal for any time limited spend exemption to be valid for 10 years from 1 April 2030. The UK will need to switch to low carbon heating at pace, with the Climate Change Committee estimating that the percentage of homes with low carbon heating will need to increase from 9% to 39% in the next decade. There is a risk that long exemption periods for the social housing sector would undermine this ambition or risk leaving the sector behind in the low carbon heat transition.

Additionally, an extension to 2040 conflicts with the net zero delivery dates of several local and combined authorities that are set at or before 2040, including:

• Greater Manchester Combined Authority
• West Yorkshire Combined Authority
• Leeds City Council
• Oxford City Council

Less than 10 years.

We propose that the exemption is reduced to five years. 

If social housing was present in a mixed tenure block of flats, meeting MEES could prove challenging where energy efficiency and/or low carbon heating solutions can only sensibly be applied at a whole block level. This is why it’s welcome that the proposed standards for the SRS are aligned with those recently consulted on for the Private Rented Sector, as this should help make it easier for work to happen in mixed tenure blocks.

Flats face specific challenges to retrofit, including co-ordinating groups of owners, the technical complexity of the retrofit required and varying incomes and ability to pay within groups of owners. Ownership laws also present a unique challenge in England and Wales as most apartments are leasehold. This means owners may need the permission of the freeholder to make changes to communal areas or may be unable to make changes at all.

To date, flats and apartment buildings have not been adequately considered in the UK Government’s retrofit policy. Given the percentage of flats in the SRS sits at 44%, the UK Government will need to outline a clear roadmap to tackle the key barriers to retrofitting these buildings if we’re to make significant progress on improving energy efficiency standards within the sector. Last year, we published a report considering how to accelerate retrofit of flats in the UK, learning lessons from countries across Europe. We outlined key recommendation for the UK and we urge the UK Government to consider these buildings as part of the Warm Homes Plan. We’re happy to provide further information or discuss this work in more detail with you if that would be helpful.

No.

We don’t agree that properties that meet EPC (EER) C prior to the introduction of new EPCs should be recognised as compliant until their current EPC expires or is replaced. Instead, it will be important to require all landlords to transition to the new EPC framework as soon as possible, particularly as the current framework isn’t seen as fit for purpose to drive improvements in energy efficiency and low carbon heating. It would also provide clarity for tenants.

Don’t know.

Given that we don’t know the extent of the likely impact of this proposal, it’s difficult for us to provide a firm view. 

We recognise that allowing landlords who have an EPC rating of C before 2028 to be recognised as compliant incentivises early action and gives certainty to landlords that any upgrades they make in the short term will be counted towards the new standards. Without this certainty, landlords may be reluctant to take early action.

However, we also stress that there are well known issues with the current EPC framework. For example, they’re not designed to incentivise low carbon heating due to the focus on lowering fuel costs rather than emissions. Allowing some properties to remain compliant under the current EPC framework would result in those properties being of a lower standard. Having two frameworks for compliance in place is also likely to be confusing for enforcement bodies, landlords and tenants alike. 

Without a clear indication of the number of properties that would likely be recognised as compliant under the current EPC framework, it’s difficult to assess the UK Government’s proposal and we would recommend the UK Government provide additional impact analysis.

Other.

We believe the approach taken by registered providers of social housing would be mixed, with different approaches by different landlords. The approach taken would depend on factors such as:

• organisational position and strategy in relation to retrofit
• decarbonisation and net zero
• resourcing available to undertake retrofit and assessments

Other.

As noted in our response to Question 15, it’s expected that different landlords will take different approaches depending on individual circumstances. However, the default position is that most landlords will take the course of action that minimises financial impact on their organisation. This is why it’s essential that landlords are made aware of forthcoming regulations and understand what’s required from them – in order to encourage early action.

To maximise engagement, communications should be positive and supportive, aiming to dispel common myths and misconceptions. Messaging should emphasise the benefits of early compliance and encourage landlords to exceed minimum standards where possible. Framing the standards as an opportunity to improve property quality, reduce tenant energy bills and contribute to climate goals, rather than a regulatory burden, will be important.

We’re encouraged to see the UK Government’s ambition to increase the number of smart meters in the SRS, given that they’re essential for tenants to access smart tariffs, which can often lead to lower energy bills. Additionally, the in-home display that comes with a smart meter can also support tenants to better manage their energy usage following improvements so that any predicted energy bill savings happen in practice.

However, there remains several challenges around consumer awareness of and confidence in smart meters which will need to be addressed. We recommend the following:

Launch a consumer awareness raising campaign on the net zero transition, highlighting the benefits of energy efficiency and low carbon technologies. This campaign should be well-coordinated with any related messaging on smart meters so that households understand the importance of getting a smart meter to enable them to benefit fully from other measures and technologies. It should also provide clear signposting to trusted sources of advice and support, enabling people to act on the information they receive, for example by accessing personalised advice on what steps the can take next.

Set up a national retrofit advice service in England to help tenants understand what actions they can take, including how to engage with new, flexible tariffs if they have a smart meter. 

The UK Government may wish to consider the experience of the Scottish Government, which has had energy efficiency standards in place for social housing since 2014. The Energy Efficiency Standard for Social Housing (EESSH) and its successor, EESSH2 have helped drive improvements in energy efficiency across the sector. Scotland is now consulting on a new Social Housing Net Zero Standard, and we note Scotland’s experience may offer useful insights as MEES is developed for the social rented sector in England.