Future Climate

Shared Housing: the cold homes that policy makers have forgotten

Future Climate and the University of Manchester, with funding from Eaga Charitable Trust, are finalising the first study into fuel poverty in shared housing.

David Weatherall of Future Climate explains the context to the work, and highlights a major policy loophole the research has uncovered.

Privately rented shared housing is estimated to represent around 2% of the UK housing stock. But that’s a figure that seems be growing rapidly, and all while the shared housing sector is widely recognised as being notoriously difficult in terms of effective policy enforcement.

There are a a number of reasons why more people are moving into bedsits and shared homes. There’s the long-term structural problem of high demand and shortage of supply of low cost housing in many parts of UK. But more recently there are the changes to the benefits system that will inevitably encourage more people to look at shared homes. Local housing allowance changes have added new limits on the financial help to pay rents. The “bedroom tax” is forcing households to downsize. People under 35 if living in the private rented sector are now only entitled to a shared room rate in terms of housing benefit.

So what’s that got to do with energy efficiency? The reality is that private sector shared homes – technically known as houses in multiple occupation, HMOs – are often some of the oldest properties, with minimal levels of insulation in walls, roofs and windows. Heating systems are often very inefficient; expensive panel electric heaters are far more prevalent than in the mainstream UK owner occupied housing stock (where cheaper-to-run gas central heating is the norm). Living in an HMO can also be a barrier to a tenants’ ability to manage their energy consumption, due to several reasons, not only the poor standards of energy efficiency, but because of the shared element of the household and pre-paid metering arrangements.

Shared housing accommodates people who are on low incomes and are often vulnerable in other ways. These are people who dont need to run the health risks of cold living conditions. And they’re people who don’t need the added worry of high bills or rent (energy bills are often included in rent in HMOs) because their homes are expensive to heat.

So it’s very surprising that – as things stand – HMOs are excluded from the goverment’s plans for regulating the least energy efficient properties in the private rented sector.

Under the 2011 Energy Act the Government has powers to restrict the rental of private owned homes with the lowest Energy Performance Certificate ratings. They’re likely to apply those powers to homes in the bottom two EPC categories – F&G, with the restriction coming into effect in 2018.

Why are HMOs excluded from these important regulations? Existing government rules state that – unlike standard private rented properties – HMO landlords do not need to issue an Energy Performance Certificate when a new occupant moves in. In a normal private rented home, the EPC has to be shown to a new tenant. But with HMOs, if the landlord doesn’t have to have an EPC, the government cannot apply the minimum standard to the property.

The obvious way round this would be to require EPCs to be shown to HMO tenants – and exploring the potential for this policy change is part of the HOME study. One challenge, for example, is that the standard calculation methodology used to produce Energy Performance Certificate doesn’t suit all large, shared properties.

Work is still underway and we’re very pleased that the report from the HOME study will come out at the same time as the government consults, in the next few weeks, on their detailed plans to enact the private rented sector energy efficiency minimum standards. The aim is that the CURE and Future Climate report will provide detailed insight to ensure that cold HMOs are effectively tackled within policy making for energy efficiency.