You are here

Landlords say energy efficiency costs are too high

by Katy Haigh, CAS Policy Officer (Fair Markets team).

This column was first published in the Herald on 11 August 2021.

Oh, to have been a fly on the wall in the room where these decisions are made, when the leaders of the world decided the COP26 conference was to be held not in New York, nor Paris, nor Tokyo nor New Delhi, but in Glasgow.

Saving the climate is a serious business of course, so it’s not the same sense of celebration as when the Commonwealth Games came here in 2014.

But be honest, aren’t you just a bit proud at the idea of Biden, Merkel and Macron discussing how to tackle climate change  over a Greggs sausage roll in Sauchiehall Street rather than on a Venetian gondola?

As US Climate Envoy John Kerry said recently, the Glasgow summit is our last best chance to stop the worst effects of climate change. And Scotland has one of the most ambitious targets for reaching Net Zero of any country, with a target date of 2045. That is a cause for some pride. However, pride alone is not enough.

This week’s report from the Intergovernmental Panel on Climate Change shows the climate emergency is worse than we thought and is a reminder that, while targets are necessary, what we really need is rapid action to prevent further climate breakdown.

Over this summer Citizens Advice Scotland has been publishing new data about how people are preparing for the drive to Net Zero over the next 24 years.

Last month we revealed that, while most people in Scotland support the target, most are unsure of what they need to do to help reach it – at least when it comes to their homes. And today we are publishing more research, this time specifically about the views of Scottish landlords.

Again, they are broadly supportive of Net Zero but they say there are significant barriers that stop them making the necessary energy upgrades to their property.

This is a major problem, which seriously threatens Scotland’s chances of achieving Net Zero in time because private rented homes make up 14% of Scotland’s housing stock and currently the sector’s levels of energy efficiency and repair are below average standards.

This not only means high energy emissions but high fuel bills for their tenants. It also results in some having to live in cold, damp, houses, which contributes to poor health and wellbeing.

And it is this latter aspect, of course, that is the core reason why CAS is undertaking this research. It’s not just that we support Net Zero in itself (though we do), we also want to understand what it means to families and individuals.

And our particular focus is on protecting those who are already struggling financially with their fuel bills – namely, those for whom the £139 increase in the Ofgem energy cap last Friday was like a punch in the gut.

The last thing they need is to end up paying the brunt of the costs of Net Zero. So, we need to consider who does pay, and how.

You can read the detail of our research into the view of landlords on our website. But the key point is that, while they agree that improving the energy-efficiency of their properties is worthwhile, they need to be properly incentivised – and helped – to make these improvements.

As you might expect, cost was a key factor. This is a particular sticking point for the private rented sector as those who need to make the investment – aka the landlords – aren’t the ones benefitting from warmer homes and reduced energy bills.

Landlords feel they need to be properly supported to make these investments, with better communication from government along with some form of financial assistance.

We don’t oppose this, but our point would be that the cost of this can’t come at the expense of the tenant. They are the consumer, and we want a just transition, so the cost of retrofit shouldn’t be recouped through increased rent and can’t inconvenience tenants already living in the property.

Landlords also told us they struggled to find clear information about support available, not just financial, but technical knowledge and expertise too. The current system for assessing the energy efficiency of a home is via an Energy Performance Certificate (EPC). However, landlords don’t think these are particularly useful.

They believe EPCs are flawed in their methodology, as using different assessors can often result in widely different ratings being given out. We feel they may well have a case here. But on the plus side, the Scottish Government has recently announced a consultation to reform EPCs, so there is a clear opportunity to resolve these problems and make the system more user-friendly.

So, to be positive, while there are barriers to landlords improving the energy-efficiency of their properties, efforts seeking to remove these continue to develop across several areas including in parliament.

Another positive point from our research is that the inclination to make change is definitely there, both among the general public and landlords. And that’s not nothing. It shows that the long battle for public opinion on climate change is being won.

But now landlords need to be supported to channel this into meaningful action. To delay will come at a higher cost down the line, not only to landlords’ finances – and those of their tenants – but to our warming planet overall.