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It’s common knowledge that landlords hold a lot of responsibility when it comes to their tenants’ welfare. And with rising energy bills alongside increasing climate change commitments, cemented in place with new legislation, there are plenty of ongoing targets to work towards. Landlords need to work both alongside the government and with tenants in a joint effort to improve energy efficiency – and there are several benefits that can be uncovered as a result of doing so.
Here’s a breakdown of how you can play your part in improving energy efficiency across your properties, helping you on the journey to helping reduce costs both for your tenants and for yourself as a landlord.
The Need for Energy Efficiency
Given the current cost of living crisis and energy bills being at an all-time high, landlords have an increasing responsibility to support their tenants. A large part of this responsibility comes in the form of making homes as energy efficient as possible. The Government is also encouraging these habits through legislation, a lot of which is directed at landlords. This is to help contribute to overall targets linked to the reduction of climate change.
Ensuring homes are well-insulated and therefore free from risks like damp or mould means that tenants’ health won’t be compromised, as several reports have shown.
Benefits of Energy Efficiency in Rental Properties
While making homes more energy efficient may seem like a mammoth task, it’s worth keeping in mind the benefits that can come from these changes.
Firstly, this is a key step towards lowering energy costs. Whether you offer a bills-included rental package or the tenants pay the bills themselves, everyone will benefit from a reduced need to crank up the thermostat during the colder months.
Keeping the property well insulated with sufficient energy-saving tools in place, will limit the likeliness of damp, condensation or mould, which in severe cases can trigger respiratory conditions. By fostering a comfortable and appealing home, you’ll prompt tenants into respecting the house and taking care of it. A comfortable living environment is also vital for maintaining good mental health, which is increasingly important with many people working from home.
When it comes to financial benefits, having an energy efficient property can increase the value of your home, allowing you to rent it out at a fair price. It will also make a big difference if you eventually decide to sell the property. On top of this, the collective need to help reduce the impacts of climate change is huge. Domestic heating accounts for approximately three-quarters of all household carbon emissions, offering yet more incentive to improve energy efficiency in homes.
Landlords and EPCs
You must comply with any new legislation relating to your duties as a landlord. Every rental property in the UK has an Energy Performance Certificate (EPC), however, the minimum requirements are changing. By 2025, all rental properties will need an EPC rating of ‘C’ or above, although this target has been set for 2028 for existing tenancies. The average EPC band in England and Wales currently is band D. These changes are reported to create a 20 percent cut in gas demand per property.
If you need an update on your current rating, you should arrange for an EPC to be awarded. This will give you an idea of how much work there is to be done.
How can Landlords Improve Energy Efficiency?
There are several steps you can take as a landlord to improve the energy efficiency of your property.
- Windows: Double-glazed windows not only retain more heat and reduce the amount of energy loss, but they also help to reduce condensation and even help to minimise external noise, such as nearby traffic. While on the topic of windows, it’s helpful to mount thick curtains to reduce heat loss during the winter especially. Encourage tenants to leave them open throughout the daytime to absorb any warmth from the sun, then close them on an evening to help retain any heat.
- Insulation: Whether you go for solid wall insulation, cavity wall insulation or roof insulation, every little helps. Each of these insulation options can create significant savings on energy bills and can be carried out by a professional – it’s recommended that you gather a variety of quotes before committing. Even fitting your hot water cylinder with an insulating jacket can save you £70 a year in heating costs, according to the Energy Saving Trust.
- Upgrade appliances: It’s recommended that you upgrade your boiler or any other appliances to those that are Energy Star rated. Alternatively, swapping out the size of certain appliances, such as a large, energy-intensive air conditioning unit, to a smaller, portable one with lower upfront costs like these, can help to reduce energy usage. You can even get devices that double as a dehumidifier or heater to save energy in other areas.
Financing Energy Efficiency Improvements for Your Rental Property
While most energy efficiency grants tend to be issued to tenants as opposed to landlords, that’s not to say there isn’t financial support out there if needed.
The ECO4 scheme is designed to allow landlords to collaborate with tenants on the lowest incomes with energy efficient upgrades, from cavity wall insulation to smart thermostats and more. However, it’s worth noting that costs may be required depending on the outcome. Only properties with a band D-G energy efficiency rating are eligible, so this grant is reserved for those most in need.
Many lenders offer mortgage products that reward landlords with energy efficient properties, and a large proportion of landlords do not currently utilise these. Alternatively, second charge mortgages, otherwise known as ‘secured loans’ could be beneficial to landlords with fewer properties. This means you can raise additional money without having to mortgage or extend your current mortgage.
A bridging loan can be used to raise cash for projects in the short term. They are flexible, which means landlords can secure funds at different stages and in several different ways. There are multiple bridging products available with different features that may suit different landlords’ requirements.
Brokers are there to offer landlords advice on what the best route might be to leverage funds for energy efficiency improvements, so make sure you tap into the support available.
