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HMO landlords discuss the benefits of smart meters

Great to see – as a result of our Smart Metering and HMOs project – that HMO landlords are now explaining to each other the benefits of the new meters.

On the excellent Property Tribes website HMO thread landlords have given their thoughts on the value of the new meters:

RefurbtoRent commented:
I have them at all properties where they are available. No more estimated bills or requests to read the meter. Online up to date access to accurate consumption data. The in-home display is trivial in comparison to the removal of one more pain in the neck (its in a cupboard somewhere)!

Allan Pritchard said:
I had them installed in all my HMOs, they are a god send, an end to estimated billing.

The possibility of falling behind on my energy at single property multiplied by the number of properties could have had a significant impact on cash flow, which caused me to spend alot of time taking monthly reads and cross checking with estimated bills.

Now, I just go off what comes out of the bank every month and cross reference that with what has been paid for the cards that go in the card meters.

again, no idea what happens to the in-home display

As we can see HMO landlords are very pleased with the more accurate billing, but perhaps less interested in the role of the in-home display which provides live energy-use information to tenants. Future Climate are keen to emphasise to landlords the benefits of working with tenants to help them use the in-home display device.

Future Climate has put together special smart meter guidance for landlords and tenants available at:

Smart Meters

Future Climate: New Advice on Smart Meters

Future Climate has been working with Smart Energy GB, to support HMO (houses in multiple occupation – shared houses) landlords and tenants in benefiting from the Smart Meter roll out.  We’re also working with council officers to help them reach HMO tenants and landlords.  Our project is  part of Smart Energy GB’s work to ensure everyone in Great Britain hears about smart meters and knows how to use them to get their gas and electricity under control.

Future Climate thinks it’s important that there’s a priority given to HMO tenants in benefiting from smart meters.  HMO tenants are usually on lower incomes and if anyone needs the benefits of lower energy costs and more control over energy use, it’s people living in shared houses.

But our project is complicated because HMOs are complicated. In our previous research we’ve identified several different types of energy payment arrangement in HMOs:

  • HMOs where landlords pay the energy bills for tenants, sometimes charging a fixed charge for energy with a cap to tenants
  • HMOs where tenants jointly share the energy bill
  • HMOs where tenants have individual pre-payment meters (particularly common where tenants have studio flats). In these situations landlords usually will be paying for use of energy in the communal areas.
  • HMOs where landlords put in place sub-meters and collect money for energy from tenants, and the landlord then pays the energy supplier.

smart-meter2

And there’s some complicated issues around fitting and using smart meters in each of these settings. For example, every home where a smart meter is installed is given a in-home display device (see image right) to help residents see how and when they’re using energy inside the home. This device is tied to a particular smart meter and has a limited range so it only works inside that property.  In situations where landlords pay the energy bills, landlords need to explain to their tenants how to use the display device and the landlord needs to make sure they keep track of it when tenants change.

In different types of HMO the advice for tenants and landlords will be different. So we’ve produced dedicated landlords and tenants guidance for different situations. You can see our guidance here:

Bringing the benefits of smart meters to shared houses

Future Climate  has received a grant to spread the word about smart meters amongst people living in shared houses in the West Midlands, North West and London. Future Climate is one of just 18 national and regional organisations to receive a large grant from the Smart Energy GB in Communities fund.

Every home in Britain will be offered a smart meter by their energy supplier, at no extra cost, by 2020. Smart meters provide gas and electricity readings directly to suppliers, meaning an end to estimated billing. They also show people how much they are using in pounds and pence, via a hand-held in-home display.  Future Climate believes the residents of shared houses should not miss out on the new smart meter technology, and the financial, comfort and environmental benefits it can bring.

The term House in Multiple Occupation or HMO  is applied to any private sector rented shared home occupied by more than 3 people in 2 households. Shared houses are the cheapest and most-easily accessed form of housing: they accommodate people on the lowest income, vulnerable and younger people.

Andy Deacon, Director of Future Climate said, “Shared houses are often cold houses. Tenants usually don’t have much money, and these are often big, draughty Victorian properties. One NUS study found that half of students in shared houses are living in cold, damp conditions.  Close to one in three shared housing residents say that they’ve fallen out with their house mates over the costs of heating.  Smart meters will give new control to HMO residents keeping them warmer, making managing bills easier and reducing disputes.”

Working with Smart Energy GB in Communities and alongside Chartered Institute of Environmental Health and the National HMO Network, Future Climate are running a project to communicate with HMO tenants, landlords and council officers about smart meters. Future Climate will  tell 1000 HMO landlords about smart meters and through them engage 5000 HMO tenants.

As part of this project we will:

1) Communicate with local council officers working with HMOs in the West Midlands, North West and London, to enable them to understand the roll out

2) Provide regionally-relevant resources that council officers can use to explain about smart meters in their communications with HMO landlords and tenants.   These resources will encourage and support landlords to explain to their tenants the benefits of smart meters.

3) Communicate direct with some of the UK’s leading HMO landlords so they can act as leaders for the shared housing sector.

Future Climate is the UK’s leading organisation working on energy issues with HMOs: our earlier research (see tinyurl.com/h4gqouu ) produced a segmentation of the different types of HMOs highlighting the different types of shared home and how different types of tenant use energy.

This grant fund is a central part of Smart Energy GB’s work to ensure everyone in Great Britain hears about smart meters and knows how to use them to get their gas and electricity under control. It is working with partners across England, Scotland and Wales to reach people who may face barriers to claiming or using their smart meter.

The fund is managed by Charities Aid Foundation (CAF), which has 45 years’ experience in designing and delivering strategic grant-making programmes. It is part of the Smart Energy GB in Communities programme, which is being delivered by a consortium of charities – National Energy Action (NEA) and Energy Action Scotland (EAS), Media Trust, and CAF – to help ensure no one is left behind in the smart meter rollout.

Sacha Deshmukh, Chief Executive of Smart Energy GB, said:

“Smart meters are transforming the way we buy and use energy. Our job at Smart Energy GB is to make sure that everyone in Britain knows what a smart meter is, how to get one, and how to use it to get their gas and electricity under control.

“We know we can’t do this job alone. We rely on expert partners to share information in ways that work for people who may need additional support to understand how to get and use a smart meter. We’re delighted to be working with Future Climate through Smart Energy GB in Communities, to ensure everyone has the information they need to benefit from this transformative new technology.”

-ENDS-

Notes to editors

About the Smart Energy GB in Communities fund

The Smart Energy in Communities fund is for organisations working with one or more priority groups that Smart Energy GB has identified as potentially facing barriers to awareness, uptake, and use of smart meters.

Grants are available for not-for-profit organisations that can help Smart Energy GB reach priority groups, including:

* district heating customers (those who share a communal source of heat with other properties)

* people lacking proficiency in English (or Welsh in Wales)

* people lacking basic digital skills

* people with a learning disability

* people with low literacy

* people with memory impairment

* people with no personal internet access

* off-grid gas customers

* prepay customers

* private tenants

* people with severe or profound deafness

* social housing tenants

Priority groups are likely to change as the smart meter rollout progresses so please refer to latest guidance for more information.

The larger grants fund (£10,000 to £25,000) will re-open in early 2017. Applications to the small grants fund (under £10,000) are open.

The following organisations have been awarded grants and will launch outreach projects before the end of this calendar year:

 

* Action in Caerau and Ely

* Act on Energy

* Carers Scotland

* Centre for Sustainable Energy

* Community Action Northumberland

* Devon Communities Together

* Future Climate

* Groundwork Leeds

* Groundwork North Wales

* Groundwork Wales

* Lewisham Council

* London Sustainability Exchange

* Melin Homes

* NUS

* Severn Wye Energy Agency

* South East Wales Energy Agency

* TAPE Community Action and Film

* Wealden District Council

 

Further details on the grants awarded can be found at: www.cafonline.org/smartenergygb

Priority groups for 2016 are below. Our priority groups are likely to change as the smart meter rollout progresses so please refer to latest guidance for more information.

* District heating customers (those who share a communal source of heat with other properties)

* People lacking proficiency in English (or Welsh in Wales)

* People lacking basic digital skills

* People with a learning disability

* People with low literacy

* People with memory impairment

* People with no personal internet access

* Off-grid gas customers

* Prepay customers

* Private tenants

* People with severe or profound deafness

* Social housing tenants

 

Visit smartenergyGB.org/partner-resources for further information on Smart Energy GB in Communities.

 

 

Making EPBD work for blocks of flats

The European Energy Performance of Buildings Directive (EPBD) is currently up for review, with a deadline for responses to the official consultation at the end of the week.

The EPBD led to the introduction of Energy Performance Certificates across Europe. It also helps ensure that countries introduce ambitious building regulations that promote energy efficiency.

But at Future Climate we don’t think EPBD is doing enough to promote energy efficiency in flats. It simply doesn’t take into account  that many buildings have multiple owners and occupiers – and getting them to work together on energy refurbishment is a challenge that national law makers need to tackle.

Here’s our ideas that we’re finalising – we’d be keen to know your views:

  • In very broad summary, the current EPBD (recast in 2010) promotes action on energy efficiency retrofit through building regulations when a building or building unit goes through a major renovation or at construction. The EPBD also requires the provision of information on energy efficiency measures, particularly at the point of sale or rental of a building or building unit
  • We believe the EPBD does not pay sufficient attention to consents barriers in energy efficient retrofit. Building ownership and tenure arrangements are increasingly complex. The directive talks in simplistic terms about building owners and tenants; it does not address how multiple different parties with a title to the whole or part of a building – all of whom can facilitate or prevent energy upgrades – can be persuaded to work together to carry out renovations.
  • We focus particularly on private buildings in residential multi-occupancy. We are concerned about these properties because evidence that Future Climate has collated shows that energy renovation of apartment blocks in England is much less common than of houses. National housing data shows that one type of apartment block – houses converted in apartments – are by far the coldest and least energy efficient homes in England.
  • EPBD does not effectively promote or allow consideration of the comparative costs and benefits of taking action on the whole building as opposed to taking action on the individual building unit. Comparative information is very important and useful particularly for owners of private apartments who (depending on different MS property law) may have the opportunity to collaborate to make energy efficiency upgrades at the building level rather than just in their individual units.
  • We would also suggest that EPBD could be strengthened to encourage MS to make it easier for apartment owners to collaborate on energy efficiency and to provide information and financing for them to do so. We  do not believe the current requirements (for example in Article 20) have been effective in this regard. We note some requirements in the Directive to provide information on block/district heating but point out that insulation or window upgrades are also often much more cost-effectively undertaken as building level action.
  • Though data is limited, multi-occupancy buildings  that have a single owner may be sold more rarely than other types of building*. We believe owners and residents of multi-occupancy buildings would benefit much more from EPBD if building owners were required to undertake an EPC-type assessment on a regular basis (ie not just at the point of sale or rental).
  • Finally, as an absolute minimum we believe it is essential that EPBD should specify some minimum information that all EPCs for building units should contain about the building within which they are located. In England and Wales EPCs for apartments do not even contain the basic address information to allow easy identification of the block where they are based –this is a major barrier for example to Local Authorities who wish to use EPC data to promote energy efficiency programmes.

*In England and Wales this problem is particularly acute due to freehold/leasehold arrangements: freeholders own the ultimate title to the building and can limit what energy improvements are made – but they often have a limited financial interest in the building despite maintaining their interest over many decades or even centuries.

Blog – Andy Deacon plans and priorities

After helping found Future Climate in 2011, Andy Deacon is rejoining the organisation. Who is he, what are his priorities and – in the middle of a wave of government cuts – where does he see the good news?

Andy_D_LeftYou’ve worked across a number of sustainability issues, which is the one you feel most passionately about?
Currently, air quality (in London in particular) and with the Paris climate talks looming large, a global deal to help cut greenhouse gas emissions. I was, for a short while, an international negotiator on climate impacts and adaptation, and understand how difficult reaching agreement at that sort of scale will be.

The government’s been busy cutting a lot of the sustainable energy policy framework….. where’s the good news?  There’s a lot of interest in what cities can and are doing. The C40, Rockefeller 100 Resilient Cities work and the smart cities agenda are showing what could be achieved and are helping to deliver practical solutions. Having worked with the community energy sector, there’s still plenty of potential there that could be spread more widely, from on the ground local engagement to business models linking energy saving and generation, and other aspects of sustainability. European legislation is also continuing to drive new developments for example in developing the energy services market and in looking at attracting investment into further improving energy efficiency. Having worked in expert groups supporting the Energy Efficiency Directive, there are interesting finance models from across Europe that could translate well to the UK and vice versa.

Back in 2011 you helped found Future Climate. Why did you think another sustainability organisation could make a distinctive contribution? When we launched Future Climate the idea was to link policy implementation with lessons from implementation and to close the loop on learning about what works (and why) and what doesn’t. Recent work on consumer experiences with solar PV and on some of the issues between landlords and tenants on home retrofits in the private rented sector have done exactly that. The ability to use quantitative and qualitative evaluation methods and techniques to make practical policy recommendations is something that not everyone is using and an area where Future Climate will continue to work. In some key areas, such as the private rented sector, progress has been really good, and the issue has moved right up the policy agenda. I’d like to see us apply our approach across a wider range of sustainability issues (bringing in air quality for example) and to build on Future Climate’s work for the Overseas Development Institute and to look internationally at lessons on business models, and climate and energy finance.

How did you get here? I trained in geography and environmental studies at university and then took a masters degree in meteorology and climatology. My initial interests were in urban air quality and climate, and my career grew from there. I was lucky to work for some influential bodies early on, the Quality of Urban Air Review Group and the Royal Commission on Environmental Pollution and they helped both sharpen some of my research and analytical skills and broaden my sustainability knowledge. Having worked in the charity sector, for local, regional and central government and in research, I’ve had a diverse set of roles across a range of sustainability subjects. I’m bringing that experience and understanding to a new set of projects and issues with Future Climate.

You’ve worked on energy efficiency in Brazil, Korea and across Europe. In between the caipirinhas and kimchi, which bits of the UK experience do you find are most interesting for international policy makers tackling sustainable energy? The UK has some well-developed analytical approaches to looking at low carbon scenarios and making forward projections of policy impacts. I’ve worked in Brazil on preparing a set of climate change scenarios for the transport and domestic sectors. There’s also been considerable interest in approaches to financing and business models for sustainability. Europe’s Energy Efficiency Directive is a big one and builds on some of the UK approaches to energy services models and large scale home retrofit finance.  I’ve supported the UK government in cross-government working groups looking at how we can maximise the directive’s effectiveness. Chairing the Finance Innovators Group of local authorities for the Energy Saving Trust enabled plenty of peer group learning among local authority teams and gave a pool of great case studies to build on.

You’ve also led a fair few European projects. Where are the areas where sustainable organisations across Europe need to be collaborating most urgently? I think pan European work on energy has been positive, both to keep the UK’s ambition level up and to draw on best practice examples from other member states. When it comes to models for financing retrofit in social housing, there’s been some good work in France and a number of Scandinavian countries continue to lead the way on district/area based heating and cooling. There is still more that could be done on energy services models, contracts and financing to help new non traditional market entrants and also innovation support to continue technology development, for example in areas like solid wall insulation, where there is still scope to improve products and consumer offers. All of this is brought together in cities and there is increasing scope for practical collaboration and I’d like to help facilitate that.

You’re just cycled 500km with a green cycling group. Who’d be your ideal green cycling companion? I’m a Bradley Wiggins fan and hope he does brilliantly in Rio at the Olympics to crown a fantastic career, but I’m not sure about his green credentials.

Blog: The legal barriers preventing improvements to England’s coldest homes

Today Future Climate, Oxford University and Westminster City Council, with support of TLT Solicitors, are launching the report“Future-proofing Flats: overcoming legal barriers to energy improvements in private blocks of flats”

  • 13% of English homes are private flats
  • Private flats in converted houses are England’s forgotten homes. They are the coldest,  least energy efficient and most likely to be damp. One in four converted flats has a serious health and safety hazard.
  • Private flats are less likely to have been refurbished with double glazing or insulation than other types of home. They are much more likely to use expensive electric heating.
  • There is one big reason for the lack of progress in improving energy efficiency in private blocks of flats: the near impossibility of landlords, leaseholders and other parties – practically and lawfully – reaching agreement for improvement works to proceed.
  • And the problem’s made worse because every flat lease can be different and because very few leases provide for energy efficiency upgrades.
  • This new report proposes solutions to the legal barriers to energy improvements in private flats, including:- greater use of standardised leases; a change in regulations to allow leaseholders to vary lease agreements to allow energy efficiency improvements to proceed.

This report shows how – in terms of double glazing, insulation and heating systems – the 13% of English homes that are private flats fall behind in energy efficiency.

The report identifies that one particular type of category of flats – older houses that have been converted into private flats – are England’s forgotten homes. They are the coldest and least energy efficient of any type of home, with the highest levels of damp. One in four (25%) flats in converted houses has a serious health and safety hazard, very often linked to cold and damp.

There is one big reason for the lack of progress in improving energy efficiency in converted houses and other private blocks of flats: the near impossibility of landlords, leaseholders, short-term tenants, mortgagees, and management companies – practically and lawfully – reaching agreement for improvement works to proceed. It is hard to get consensus with so many different interests involved and under the leases the needed improvements may not be allowed.

The problem is made more complicated by the fact that every flat lease can be different, and there’s no easy way of knowing who has the right and responsibility to upgrade different parts of the building, for example window frames. Few, if any, leases provide for energy efficiency upgrades.

The energy efficiency problems in flats – linked to the complex legal barriers – have been largely ignored. These barriers and the solution to them are the focus of the groundbreaking Future-proofing Flats report.

Commenting on the report, Prof Susan Bright, Professor of Law at New College Oxford and one of the report’s authors said, “We simply don’t have the legal mechanisms for private flats to benefit from retrofitted energy efficiency improvements. They may be stuck with poor insulation, single glazed windows and inefficient or expensive heating. As a result, from the day they are built, private blocks of flats start to fall behind the rest of the housing stock in energy terms. This is a problem we’re going to have to address if we’re going to hit our 2050 target of an 80% reduction in carbon emissions, much of which has to come from changes to the way we use energy in homes”.

The condition of flats

Based on analysis of the official English Housing Survey 2010/11 data, Future Climate research shows that older private flats comprise 8% of housing stock, but one in five (19.4%) of the properties without double glazing; cavity walls are uninsulated in 71% of pre-1980 private sector flats, versus 42% of houses of the same age.

Flats are not significantly more likely to have old heating systems, but are much more likely to be heated by electric heating – generally a more expensive heating fuel than gas. 24% of pre-1980 flats are electrically heated, compared to 4% of pre-1980 houses.
Older flats are much less energy efficient than average, and flats formed out of converted houses are the least energy efficient type of housing in the UK. Converted flats are typically older buildings and often have not been well cared for. They show far higher damp, disrepair and “non-decency” than any other type of home1.

The legal issues

The Future-proofing Flats report is based on research and an expert meeting staged in March this year. The report presents a briefing note to explain the legal issues relating to energy upgrades in flats. The report then presents some ideas for solutions to the barriers. These include steps such as:
• Making sure that freeholders and leaseholders are aware of the potential for energy saving upgrades to insulation, windows and heating systems or solar panels – what are the costs and benefits of different improvements?
• Ensuring freeholders are following best practice in making energy saving improvements where leases allow it
• Using lease renewals and renegotiations as opportunities to change leases to allow energy efficiency upgrades to go ahead – this will include educating solicitors on the issues
• When new blocks of flats are built, using standardised leases that allow for energy efficiency upgrades in the future
The report also presents some ideas for changes to government legislation and regulations that could make action on energy efficiency in private blocks of flats easier, such as:
• Requiring freeholders who own the block to undertake an energy efficiency survey, and to proceed with works that are reasonable and cost-effective
• Legislation that allows the “retrospective insertion” of clauses in leases to allow energy efficiency to proceed
• Amend secondary legislation to allow leaseholders to apply for lease variations to enable reasonable energy efficiency measures to be carried out

The report highlights that these are initial ideas and that further research in this area is needed. Data on leasehold blocks is very limited, as is information about the specific legal arrangements in different properties. Future Climate, TLT Solicitors and Professor Bright will be leading a further meeting later in 2015 to investigate further the solutions in this area.

Notes

According to the latest English Housing Survey (2013 data):

  • 12.7% of English homes are private flats

According to the English Housing Survey 2012 data – the last dataset published in detail:

  • Private converted flats have the lowest average SAP (energy efficiency) rating of the eight different types of home analysed in the English Housing Survey- private converted flats average SAP: 52.9. The average SAP for all UK homes is 57.3 (see Table 1.1 English housing survey 2012: energy efficiency of English housing report)
  • 25.6% of converted flats have a Category 1 (serious) health and safety hazard and 11.6% have damp in one or more room. 10.7% of converted flats have a serious “excess cold hazard.” 13.7% of all homes have a Category 1 hazard and 4.3% of all homes have damp. 4.7% of all dwellings have an excess cold hazard. (Source: English Housing Survey Profile of English Housing 2012 Ch. 3, Tables 3.3 & 3.9) 

Minimum Energy Performance Standards in Shared Housing

Minimum  Energy Performance Standards in the private rented sector have just been passed into law. How will the final regulations affect shared housing (houses in multiple occupation) and  what could a future government do to improve their impact?

David Weatherall explores how minimum energy efficiency standard in the private rented sector will reach people living in shared housing (Housing in Multiple Occupation – HMOs). Based on the Future Climate study “Houses in Multiple Occupation: Energy Issues and Policy

A few weeks ago, the government announced its response to the consultation on minimum energy performance standards (MEPS) in the private rented sector.

MEPS form part of the 2011 Energy Act and are an important step forward in UK energy policy. In the consultation on the detail of these regulations, several organisations raised the question of if and how the standards would apply in HMOs.

It’s good news that in moving from draft to final proposals for MEPS, the government has brought HMOs more clearly in scope.

In particular the government has now clarified that the minimum E energy performance standard (to take effect from 2018) will apply when someone moves into a room or bedsit in an HMO – as long as that HMO already an Energy Performance Certificate (EPC).

But, as in the rest of the private rented sector, HMO landlords will only have to comply with the minimum E standard when the required improvements can be undertaken at no upfront cost to them – either because they access a grant, or because the tenants are willing to pay for the improvements.

So, moving into an HMO will be a trigger for the minimum “E” standard. But, as we discuss below, more steps are needed to ensure that HMOs benefit equally from these regulations, and to make them more effective across the private rented sector. In summary:

  • People moving into shared homes should have the right to see an Energy Performance Certificates (EPCs) for their property. We also need clarity on what type (domestic or non-domestic) of EPC different shared houses require, and clarity on how rules apply to HMOs that need non-domestic assessments.
  • More broadly, government should be taking much more action to ensure that landlords comply with the requirements to produce an EPC whenever they rent out a property.
  • Landlords should be required to make a limited contribution towards the cost of carrying out energy saving upgrades to meet the minimum standard. This is particularly important in HMOs that can be more expensive to upgrade.

What are the private rented sector energy efficiency regulations?

The government’s private rented sector minimum standards are as follows:

  • From April 2016 tenants will have the right to request, and landlords will not be able to unreasonably refuse, energy efficiency upgrades that are cost-effective
  • From April 2018 all private rented sector homes will have to meet a minimum Energy Performance Certificate “E” standard when they are put on the market
  • From 2020 all private rented homes will have to meet the minimum EPC “E” standard

But there’s an important caveat. Landlords will only have to make energy efficiency upgrades where the measures can be fully funded from government grants or funding. Alternatively they will have to comply if the tenant is willing to pay for the improvement, including through the Green Deal pay as you save mechanism.

Another important point to note is that the minimum “E” rules only apply where a property has already been issued with an EPC. Every property has to have a current EPC whenever it’s put on the rental market, but there have been high levels of non-compliance with these regulations in the private rental sector.

Minimum Energy Efficiency Standards and HMOs

The government has now clarified that the minimum E energy performance standard (to take effect from 2018) will apply when someone moves into a room or bedsit in an HMO – as long as that HMO already an EPC.

The applicability of the rules to HMO room rental situations is very welcome, but an HMO might not have an Energy Performance Certificate for two reasons:

  • The government does not require an EPC to be provided to an HMO tenant when they move into a room or a bedsit. An EPC is required to be issued – as with any other flat or house – when an HMO is sold or rented out as a whole property. But if an HMO has only been rented out on a room-by-room basis in the last ten years, it will not have a current EPC.
  • HMOs, like all types of private rented home, may not have an EPC because the landlord didn’t get one when he/she was supposed to.

Enforcement in HMO situations

There are major issues around how local authorities will enforce compliance with the overall 2018 minimum standard regulations, given the cuts to many local authority housing and trading standards teams as a result of austerity. Unless every home that should, has an EPC, it’s hard to see how the overall regulations will have impact.

But the compliance problem seems even more stark in HMO room rental situations. With the rental of other types of flats, the property should be advertised with its EPC rating, making enforcement of minimum standards easier. But HMOs do not need to be advertised with an EPC rating and it will require an additional investigation by the council before any compliance action is taken.

Finally, some HMOs may require non-domestic EPCs (as they are regarded as non-domestic properties, like hotels). It is not clear how enforcement will happen in this situation. The government has not issued any guidance on what type of EPCs different types of shared housing requires.

Cost-effective upgrades

HMOs – as we showed in our HOME research – are more likely than other properties to be expensive to insulate. It’s therefore less likely that these homes will be able to access grants and funding to enable home upgrades to be made at no cost to the landlord than other types of private rented homes.

As a result, the minimum standard rules are less likely to apply in HMO situations than in other situations.

A related issue is that our research found that ECO funding (the major source of funding for energy efficiency measures) is unlikely to be spent on complicated and expensive-to-improve houses in multiple occupation. ECO funding will certainly not reach larger HMO properties that probably require non-domestic EPC assessments.

Finally, HMO tenants are very unlikely to take up Green Deal. A group of HMO tenants would have to agree to do this between themselves and as people often on lower incomes, HMO tenants may be particularly likely to fail Green Deal credit checks.

Conclusion

The MEPS are good news, and progress has been made to bring shared homes more firmly into scope.

Unless the government resolves the issues around ensuring compliance with EPC requirements, and introduces a minimum contribution requirement from landlords its hard to see the MEPs having anywhere near full effect. That’s the case for all types of private rented homes, but the problems are particularly acute in the HMO sector.

We also need clarity on the issue of the type of energy assessment that different HMOs require and how domestic energy efficiency standards and programmes apply to HMOs that are assessed using non-domestic energy assessments.

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.

Private rented sector energy standards fall short

The government has today published its long awaited consultation on the private rented sector minimum energy efficiency standards.   The “tenants improvements” regulations will give tenants rights to ask for energy efficiency upgrades from 2016, and the “minimum energy standards” regulations will prevent rental of F&G banded homes, where they can be upgraded at no upfront cost to the landlord, from 2018.

The consultation shows a lot of hard work and creativity on the part of civil servants in planning for this new type of regulation. But while the detail is impressive, its hard to see that the fundamentals stack up.

The “tenants improvement” regulations are just improbable. Tenants will be expected to organise an energy efficiency assessment, identify how the full cost of the improvements will be paid for, and then serve a notice on their landlord requiring the upgrade. Landlords will have multiple grounds to reasonably refuse consent, and will likely still be able to threaten an eviction as punishment for a troublesome tenant – the consultation presents a few ideas on tackling retaliatory eviction in this situation but no hard plans.

But the main problem with both the “tenants improvement” and “minimum “E” energy standard” proposals is financing. There is no requirement that the landlord has to put up any funding towards the cost of improvements that will be required under the regulations.  And the proposed alternative sources of funding simply aren’t adequate:

  • Green Deal has failed almost totally to date and there is no evidence of real solutions to its problems. Many measures required fail the golden rule and any attempts to relax the rule would see tenants paying more than they are saving.
  • ECO doesn’t reach the private rented sector: anecdotal reports suggest activity in the sector has been limited to date and that situation is only going to get worse with the cuts to CERO and CSCO, with government’s official impact assessment modelling showing that only 1% of ECO funding* is expected to reach the private rented sector.
  • Local and national grant schemes come and go and can provide no stable source of finance sufficient to enable the regulations to take effect.  This is evidenced by today’s announcement from DECC that the Green Deal Home Improvement Fund grants will be reduced.

The final source of funding proposed in the consultation is tenants’ money.   The government suggests that tenants can oblige their landlords to agree to upgrades by paying for the improvements in the property themselves. But why should tenants be expected to pay to upgrade their landlords’ homes?

Modelling from WWF, UKGBC, Parity Projects and EST has repeatedly shown that the costs of meeting PRS (private rented sector) minimum standards are – for most F&G banded homes – below a few thousand pounds.

We need to get ECO and Green Deal working for the PRS. We need proper government investment in energy efficiency as a central part of our national infrastructure. But we can also surely ask landlords to make some contribution (say a maximum of £2000) to bring their home up to a basic minimum “E” standard of energy efficiency. We should remember that most homes below an E standard have already been officially correlated with homes that pose a health and safety risk of dangerous, excess, cold.

*Source: Future of ECO Impact Assessment, 2014.   P.16 shows 1% of measures going to PRS from each of CERO and CSCO ECO sub-schemes. CERO & CSCO make up the majority of ECO funding. There is no tenure breakdown of how HHCRO funding is spent*

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.