19 December 2014: A mayoral approval document outlines support to two new projects to save energy and carbon in properties in the private rented sector (PRS) and to boost membership of the London Rental Standard (LRS).
The Mayor has approved:
- Expenditure of £141,000 of capital grant funding and £45,000 of revenue funding including for assessments and testimonial material to support delivery of at least 50 demonstration projects with LRS-accredited landlords, each resulting in a retrofitted PRS home and raising awareness of the benefits that can be achieved.
- Expenditure of up to £80,000 revenue funding for the development and implementation of a pilot programme to trial the use of incentive payments to LRS-accredited lettings agents for achieving retrofit works on at least 400 PRS properties they let or manage on behalf of private landlords.
- Expenditure of up to £20,000 revenue funding for the evaluation of both projects.
The approval document sets out the strong rationale for driving ahead the energy efficiency message in the PRS:
- the PRS accounts for a quarter of London’s housing stock (850,000), is growing fast (nearly doubling in size since 2000)
- the Energy Act 2011 requires that from 2016 it will be unlawful for landlords to refuse reasonable requests from tenants for energy efficiency improvements, and from 2018 it will become unlawful to rent out EPC F and G rated properties (see DECC’s recent consultation on PRS Energy Efficiency regulations here
- the Landlords Energy Saving Allowance (LESA), a tax allowance of up to £1,500 per building per year, is available but will end on 6 April 2015
- the PRS is the worst performing sector in terms of quality of stock. 17% of PRS tenants are in fuel poverty, while 30% of PRS homes fall below the Decent Homes standard (compared with 10% and 21% across London overall).
Full details of each programme is set out in the approval form. The project will be overseen by the Mayor’s Housing Investment Group, which has previously discussed this initiative (see item 8 of minutes) and raised a number of issues including:
- reasons for targeting PRS properties rather than owner-occupied properties
- Energy Performance Certificates (EPC) had not yet had a big impact but this would likely to change as from 2017
- Questions were raised as to whether the scheme would be replicable on a greater scale. The Group heard that, if successful, the programme could be scaled-up and delivered through energy suppliers or contractors, as part of their marketing budgets. A discussion was held regarding the potential involvement of energy suppliers to incentivise the programme. It was agreed that while this could be looked at for future iterations of the programme, to engage energy suppliers at this stage would complicate and delay the start of the programme.