The Tenant Survey: Energy Efficiency in the PRS
The Tenant Survey
There is currently a significant focus on the energy efficiency of private rented sector housing. The Government is currently consulting on a proposal that would expect private landlords' rental properties to achieve at least an EPC "C" rating by 2028.
The NRLA research observatory has previously focused on energy efficiency in the private rented sector in quarterly surveys, finding many landlords have made energy efficiency improvements to properties in their portfolios. There is however much concern from landlords surrounding the 2028 target, with fewer than half of landlords believing they would achieve this in Q4 2020. The consequence of this could be a contraction in the supply of housing.
The NRLA regularly commissions the market research company Dynata to conduct a survey of private rented sector tenants. This tenant survey, with a sample size of 2,048, asks questions about the tenants themselves, the properties they rent and their experiences and opinions of said properties.
This blog looks at the selection of energy efficiency questions that tenants were asked. Tenants were asked about the energy efficiency of their rented properties:
- What is the energy effiency rating of their rented property
- Whether they had requested any energy saving installations
- How the landlord had responded to said requests
- How tenants would react to disruptions from the installation of features.
EPC Ratings in the PRS
Tenants were asked if they were aware of the EPC rating of their rented properties. It is worth noting that almost half of the 2,048 tenants surveyed were unsure of the EPC band of their property (46%). There was also a further 11% of tenants who recalled being given this information but could not remember the rating. This lack of awareness could highlight the level of importance in which tenants attach to their rental properties' energy efficiency rating.
Another group of tenants, around a fifth (22%), stated that their landlord had never given this information. A figure this high could be cause for concern as this rating should be cited on electrical safety reports, which are a legal requirement for landlords when marketing their rental properties. There is the possibility tenants could be living in buildings which are exempt from this requirement however, for example listed buildings or certain types of HMOs.
Energy Saving Installation Requests
Have tenants requested energy saving installations?
If tenants are interested in improving the energy efficiency of their properties by installing energy saving features, they will most likely require the permission of the landlord to make said changes. The next question pitted to tenants was whether they had asked their landlord to make any of these changes.
Over half of tenants had not requested any features to be installed in their properties (57%). The most popular features tenants had asked their landlord to install were as follows:
- Smart meter (15%)
- Double glazing (11%)
- Improving efficiency of central heating system (8%)
- Low energy lighting (7%)
- Installing or improving loft/floor/wall insulation (7%)
Tenants were also asked for the single feature that would help save the most on the energy bills of their properties, most commonly tenants stated this would be to extend or install double glazing (14%).
Though the proportion of tenants who had asked for such features is low in terms of the entire sample, there is clearly an appetite for the installation of energy saving features amongst a minority of PRS tenants.
Are landlords willing to take energy saving measures?
The sample of tenants who had requested the installation of energy saving features in their homes were subsequently asked how their landlord had responded to said requests.
It was found that over half of landlords had responded positively to these requests (51%). A further 27% of tenants reported their landlord had given a mixed response to multiple requests. This means that the majority, over three quarters of landlords, reacted positively to at least one request for energy efficiency measures. Just 15% of landlords had responded negatively entirely.
There is clearly a willingness from landlords to work with tenants to improve the energy efficiency of their properties.
Energy efficiency measures
Tenants' willingness for disruption
Though it is a necessity for the stock of PRS to improve its energy efficiency as part of the wider environmental effort, there are obviously a host of costs and potential disruptions to home life associated with the installation of these features.
Disruption to tenant home life
Tenants were therefore asked how they would respond if their landlord were to propose installing major energy efficiency improvements which would cause disruption to them whilst they were living in the property.
It was found that over half of tenants would be willing to allow access to the property and put up with the disruption of installations (53%). Further to this, over a quarter stated they would put up with the disruption but would expect some form of rent reduction (27%). Overall, 80% of tenants would therefore be willing to allow improvements that may cause disruption.
A further 14% of tenants were unsure of this question, but perhaps most importantly just 4% of tenants stated they would not give any access to the property for disruptive installations.
Cost of installation
One of the main barriers to landlords improving the energy efficiency of their properties and hitting the EPC "C" rating by 2028 is the costs associated with such improvements. One method by which landlords could achieve this would be by increasing rents to assist with these costs. Tenants were therefore asked if they would be willing to accept higher rents for a more energy efficient home.
Over half of tenants stated they would not be willing to pay higher rents for more efficient homes (58%), a further 24% were unsure. With just 18% of tenants willing to assist with the associated costs, there is clearly a direct need for funding to help landlords cover the costs and improve the energy efficiency of the PRS housing stock.
The task of achieving an EPC "C" rating by 2028 is a daunting prospect for many landlords should this proposal come into effect. This tenant survey has shown that there is little awareness amongst tenants of the energy efficiency of the properties they are living in and, according to this survey, 38% of tenants who were aware of their EPC rating stated their property was below the required level.
There is an appetite for improving the energy efficiency of their properties among a minority of tenants, with features such as smart meters and double glazing most sought after. The majority of landlords have also been shown to react positively to tenants requesting such features.
Similarly, tenants are mostly accepting of the potential disruptions caused by installing energy saving features. The most pressing concern for landlords and tenants alike regarding energy efficiency however is the costs associated. Tenants are mostly, and understandably, unwilling to pay higher rent. Previous NRLA research has shown that cost and the sheer quantity of work necessary are the biggest barriers for landlords to achieve this target.
Should the Government want the majority of landlords to hit the EPC "C" rating by 2028, there is a need for wide-ranging and significant funding to allow this vision to become reality. The NRLA is currently campaigning to help landlords in this regard, calling for:
- More targeted funding and financing for landlords.
- Reduced cost through tax efficiency.
- Building Renovation Passports to replace EPC system.