One in 20 rental properties in UK do not yet meet minimum energy standards

The private rental sector in the UK has seen rapid energy efficiency improvements in recent years, but one in 20 properties still fail minimum standards, new research has found.

While the number of the worst rated properties has halved and significant improvements have been made, the continued level of inefficiency mean tenants are over paying on their energy bills by an estimated £13 million every month, according to the analysis from insurance giant AXA.

‘Our study has found that landlords are making significant investments into improving the energy efficiency of their properties and this is part of a bigger trend,’ said Gareth Howell, managing director of AXA Direct, adding that 95% are trying to so the right thing for their tenants.

‘When we look at our surveys of tenants and landlords over the past five years, we see progress across the board on security, maintenance and numbers with proper tenancy agreements in place,’ he added.

Howell explained that many landlords insured with AXA are accidental landlords who typically own one or two properties. ‘They are, by and large, professionalising and investing more seriously in their tenants’ comfort and the future health of their rental properties. Pockets of failure exist in this market, but it is not the story for the vast majority,’ he pointed out.

They survey found that one in 20 properties have an Energy Performance Certificate (EPC) rating of F or G even although from April next year it will be illegal to rent out homes rated F or below under a new tenancy, as part of new laws designed to improve the energy performance of the UK’s housing stock.

Based on the survey’s result, AXA believes around 200,000 households will be affected by the new rules although there are growing concerns that guidelines will allow too many landlords to register exemptions.

The survey also underscored the vast discrepancy in energy bills paid by those tenants in the most energy efficient properties compared to the most inefficient. Those living in a Band A property paid an average of £61 per month for energy, while those in Bands F to G paid almost double, at £112.

However, progress is being made and the number of F and G rated properties has halved since 2015, and more than half of the survey respondents said they live in a property rated A to C.

Tenants in England and Wales are also now more likely to have a smart meter and a more efficient boiler than those who own their own home, while Scottish tenants reported the highest energy efficiency rates in the UK.