Effective energy efficiency standards for private renters
More and more people are renting their home in the private sector. Many are paying a high price to live in homes which are inefficient, cold and expensive to heat. There is little business incentive for landlords to improve energy efficiency.
In the Clean Growth Strategy, the government committed to tackling this issue. The strategy recognises that the current policy aimed at improving the worst performing private rented properties will fall short. It announced a plan to make it more effective.
We commissioned economic research [ 1.5 mb] to assess the impact of such a move. Specifically we looked at a policy requiring landlords to pay for measures, with a cost cap to exempt properties where the costs are particularly high. We looked at three typical properties, covering different regions and types of property, and three different cost cap scenarios.
Our research shows a more effective minimum standard would bring a substantial net benefit to tenants, by reducing their energy costs, and because the impacts on the rental market would be limited.
Based on the findings, we recommend that the government bring in a minimum energy efficiency standard, with a £5000 cost cap.