Future Climate

Shared housing tenants at risk of higher energy bills

Minimum energy efficiency standards needed for shared housing

 A new report is highlighting that many shared homes will miss out on the government’s planned minimum energy standards, which are designed to protect tenants from cold homes and high energy bills.   As a result of the Coalition Government’s welfare and benefit changes, private shared housing increasingly houses the poorest and most vulnerable people.

The new report assesses progress on tackling energy efficiency in shared housing[i]. It comes from Future Climate, a non-profit clean energy organisation, and the University of Manchester’s Centre for Urban Research and Energy with funding from the Eaga Charitable Trust[ii].

Earlier this week, DECC published a consultation on minimum energy standards for rented homes which requires that, from 2018, private rented homes cannot be let out unless they meet a minimum standard on the official Energy Performance Certificate (EPC)[iii]. For homes that are let as whole properties, the certificate has to be shown every time a new tenant moves in. This requirement to produce and show an EPC has been in place since 2008.

But, as rules stand, landlords who let homes on a room by room basis, don’t have to show an Energy Performance Certificate to new tenants.  Without a certificate ever needing to be produced, there will be no test as to whether shared homes meet the new minimum standard.

Campaigners have long argued that tenants in shared housing – technically known as “Houses in Multiple Occupation” (HMOs) – should have a right to see an EPC at point of rental like all other tenants. But in 2010 the Coalition government refused to extend the certificate requirements to HMO tenants.  The Department for Communities and Local Government (DCLG) argued that to require EPCs for shared housing tenants would be unnecessary “goldplating” of regulations and a burden on landlords[iv].

Under government welfare changes the number of HMOs is increasing. Claimants of housing benefit under 35 years old are now only allowed to claim housing benefit at the “shared room rate”, effectively requiring them to live in HMOs. This is affecting around 90,000 younger people.[v]

Shared homes are often old and cold. Larger private rented properties are usually pre-20th century homes with limited wall and roof insulation[vi]. Expensive electric heating is also common, and recent studies have pointed to a very high prevalence of condensation and mould[vii].

Co-author of the report, David Weatherall of Future Climate said, “HMOs are old and often cold properties that house the poorest and most vulnerable people. They should be at the top of the list for energy efficiency policy makers.  But at present, they seem to have been totally forgotten. It is absolutely vital that vulnerable tenants are not left paying high energy bills in cold, damp, unhealthy homes while the rest of the private rented sector is improved. HMOs must be included in government’s energy efficiency standards.

We want DECC and DCLG to focus their attention on energy inefficient HMOs, and not just put them in the “too difficult” box. We need a programme that can support local authorities to identify the communities that have clusters of large, under-insulated, shared homes and work with landlords to improve them. And we should expect all HMOs to meet a minimum energy performance standard.”

Future Climate is pointing out other problems with the exclusion of shared housing from the government’s energy efficiency and fuel poverty policies:

  • The government’s official definition of fuel poverty can’t take account of people sharing homes and sharing energy bills.
  • It’s not clear what type of technical energy assessment larger shared homes require. Are they non-domestic buildings (like hotels) or residential buildings? This is a problem for landlords who want to do the right thing and get an energy performance certificate.
  • The Energy Company Obligation (ECO) which funds energy efficiency upgrades is unlikely to target shared homes. Energy suppliers look for the cheapest way to make their ECO targets. Shared homes – larger properties with multiple tenants can be complicated and expensive to improve.



[i] The HOME study final report and summary reports are available at: http://eagacharitabletrust.org/index.php/projects/item/houses-in-multiple-occupation-improving-policy-and-practice

The study aimed to:

  • Review available data, analysis and findings from previous research to gain insight into approaches to HMOs and HMO stock profile;
  • Gather qualitative evidence from policy makers, regulators and practitioners in housing improvement, energy efficiency and poverty alleviation at national and city level;
  • Make recommendations for changes in policy and practice to improve energy efficiency in HMOs, along with practical guidance to support interventions.

[ii] For more information on the organisations involved in the study see http://futureclimate.org.uk/about-us/  http://www.seed.manchester.ac.uk/cure/  www.eagacharitabletrust.org

 [iii] Section 43 of the Energy Act 2011 (link: http://www.legislation.gov.uk/ukpga/2011/16/section/43/enacted) requires that government introduce regulations to prevent landlords of domestic private rented properties renting the property unless it meets a minimum energy performance standard. These regulations must take effect by 1 April 2018 at the latest.  Government issued a consultation on 22 July 2014 indicating that this minimum standard will be “E” on an energy performance certificate (see https://www.gov.uk/government/consultations/private-rented-sector-energy-efficiency-regulations-domestic) though there is also a financial test on the standard (ie only measures with no upfront cost to the landlord, utilising Green Deal Finance and the Energy Company Obligation).

 [iv] See DCLG (2010) Making better use of energy performance certificates and data: Summary of responses, page 7: This document summarises responses to a consultation that was issued in the last days of the Labour Government in 2010.  The response document – produced under the Coalition Government – shows that despite 94% of consultation respondents favouring the extension of EPCs to HMOs, the new government decided not to take the proposal forward because to do so would be “goldplating” regulations.  https://www.gov.uk/government/consultations/making-better-use-of-energy-performance-certificates-and-data

 [v] In 2010 Spending Review HM Treasury estimates that this change to the Shared Room Rate would affect 88,000 younger people between 2012 and 2015. http://webarchive.nationalarchives.gov.uk/20110109132010/http://cdn.hm-treasury.gov.uk/sr2010_pressnotices.pdf

 [vi] Evidenced from English Housing Survey 2011 data (latest available). See HOME report for detailed citation/analysis

 [vii] A 2014 NUS study found that 50% of students in private rented housing (most of them living in shared homes) were suffering condensation, damp or mould (NUS “Homes Fit for Study” http://www.nus.org.uk/Global/Homes%20Fit%20For%20Study/Housing%20research%20report_web.pdf ). Other recent research studies from Shelter, Crisis and the University of Sheffield (see HOME report for detailed citations/analysis) also point to major problems with condensation and mould for people living in cheaper private rented sector housing.