The Country Land and Business Association (CLA) is warning that
new proposals aimed at improving the energy efficiency of homes
could inadvertently lead to a mass sell-off of over 50,000
privately-rented homes in the countryside - pushing up rent
prices and intensifying the rural housing crisis.
In September, the Government proposed to increase the minimum
energy efficiency rating from Band E to Band C for new tenancies
from 2025 and for all existing tenancies from 2028. The proposals
also recommend increasing the landlords cap – the maximum amount
of money a landlord must invest to improve a property’s energy
efficient rating – from £3,500 to £10,000. This investment needs
to be made every 5 years to allow the property to continue being
rented if its energy efficiency rating remains below band C.
While decarbonising rural homes is an important contribution to
tackling climate change, these regulations are based on an
assessment methodology which continually undervalues the energy
efficiency of older, off-gas grid homes. This means that many
rural homes will never be able to reach the tightened minimum
standards simply due to how they are measured, which is likely to
result in landlords selling these houses. In addition, these
regulations would mandate tens of thousands of pounds worth of
potentially harmful measures to older buildings, such as solid
wall insulation.
To help landlords pay for the upgrades, in September, the
Government launched the Green Homes Grant, a £2bn scheme to fund
at least two thirds of the cost of upgrading the energy
performance of homes, up to £5,000.
However, all upgrades must be undertaken by Trustmark installers.
There is a severe shortage of rural TrustMark installers, partly
due to the cost of membership. The demand has been so high that
urban accredited firms have no interest in travelling to remote
areas, when there is work on their doorstep. This has led to
rural homes not having access to the grant, despite being the
least energy efficient and arguably the most important to
decarbonise.
Modelling from the CLA, which represents 30,000 rural businesses
across England and Wales, shows that a 12.4% reduction of rural
privately rented sector homes, which do not currently meet energy
efficiency rating of Band E, would result in 51,653 fewer rural
privately let homes.
Over half (60%) of the CLA members who responded to a recent
survey let at least one Assured Shorthold Tenancy below market
rent and nearly a quarter of their Assured Shorthold Tenancies
were let below market rent, with members in effect acting as a
social housing provider. The costs of trying to meet the new
standards are unaffordable for these lower-rent homes and the
works required may have the unintended consequence of displacing
older, vulnerable tenants.
If landlords were able to make the £10,000 investment to improve
energy efficiency rating, rent would have to increase by 6% a
year for the next 15 years to recoup the money. This is simply
not an option, especially in rural areas where 90% of rents are
already being deemed unaffordable to key workers. A sell-off
would force people to leave their homes and communities and
exacerbate the rural housing crisis.
The CLA is calling for:
- The assessment methodology for EPCs to be fundamentally
reviewed so that rural homes are accurately assessed;
- The metric used for the minimum energy efficiency standards
to be based on carbon (environmental impact rating) not fuel cost
(the current method of energy efficiency rating);
- The Green Homes Grant, or similar, to provide targeted
funding of £10,000 to rural homes to enable their transition to
low-carbon heating.
Mark Bridgeman, President of the CLA, said:
“Our members play a crucial role in the provision of homes in
rural communities across the country. But this new raft of
Government legislation could have a devastating impact for those
who live and work in the countryside.
“There is already a rural housing crisis- and this will only
increase if a large portion of the existing rental stock ends up
being sold, as it is no longer economically viable for landlords
to retain.
“Our members understand the importance of decarbonising these
houses and want to do their bit in helping the environment, and
many have already invested significant sums on renewable options.
Some insulation solutions will work in rural homes, but many of
the ones that work on old houses are often incredibly expensive.
“The unique challenges that affect rural properties in
decarbonising seem to have been forgotten about in the new policy
proposals. If the government are serious about decarbonising
rural properties, they need to support and invest in the sector.
Rural areas are so often left behind with Government initiatives
and this must not continue.”
