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Today, more than ever before, there’s a huge focus on the impact we have on the environment. The world is getting greener, and both major political parties have made pledges to make the UK carbon neutral within the next 30 years. The UK has pledged to reduce its greenhouse gas emissions to net zero by 2050, meaning it will only take as much planet-warming gases - such as carbon dioxide - out of the atmosphere as it puts in. By 2050, we are legally required to have reduced our greenhouse gas emissions by 100% from 1990 levels.
Taking action to make the UK’s homes more energy efficient would have a significant impact on our carbon footprint– 16% of our total carbon emissions come from our homes, with the average home in the UK losing heat three times faster than a German property. This is largely due to the fact that the UK has some of the oldest homes and worst insulated homes in the world.
Over the last decade, the laws around energy efficiency in rented properties have tightened and there are now minimum standards. For the vast majority of private landlords, this means you cannot now let a property unless it has a minimum rating of ‘E’ on the Energy Performance Certificate and there are fines of up to £5,000 if you don’t achieve this rating, subject to some exemptions. You can read more about the minimum energy efficiency standards for landlords in our article here.
It’s also important to realise that these are minimum standards – a level of energy efficiency that a rented home cannot fall below – and there is a lot more you can and should do to go over and above this basic level. Indeed, until September 2023 government proposals were that by 2025 it would be a legal requirement for newly rented properties, and by 2028 for existing tenancies, to have a minimum EPC C rating.
However, in September 2023, the Government finally responded to a consultation into improving the energy performance of privately rented homes, which took place in January 2021, and there are now no plans to introduce new energy efficiency standards for rental properties.
The Government revised its plans to reach netzero by 2050, to ‘ease the burden on working people’ and this involved scrapping several green policies that affected landlords but were part of its key net zero pledges. This included minimum EPC rating C levels for rental properties and phasing out gas boilers. So, for now the existing minimum EPC rating of E remains in place.
According to the National Residential Landlords Association (NRLA), a lot of landlords were selling properties because they thought they couldn't get them up to an EPC rating C, and some were not buying properties unless they were EPC C and above. Others had already committed to carrying out energy efficiency improvements, with one study revealing that 80% of landlords were already prepared for the 2025 EPC regulation deadline. Nearly half of those quizzed had spent between £500 and £20,000 on improving or investing in their properties over the past year. Responding to the Government’s announcement scrapping proposed energy efficiency targets for households, including rental properties, Ben Beadle, Chief Executive of the NRLA, said:
“We want to see all properties as energy efficient as possible. But the uncertainty surrounding energy efficiency policy has been hugely damaging to the supply of rented properties. Landlords are struggling to make investment decisions without a clear idea of the Government’s direction of travel. It is welcome that landlords will not be required to invest substantial sums of money during a cost-of-living crisis when many are themselves struggling financially. However, ministers need to use the space they are creating to develop a full plan that supports the rental market to make the energy efficiency improvements we all want to see.”
The energy efficiency targets for rental properties are on hold for now, but if Labour win the next general election, they could reintroduce the proposed minimum EPC rating C rules. Whatever happens, the more energy efficient and eco-friendly you can make your property, the better it is for the environment and the more desirable it will be to tenants that want not only low energy bills but also a low carbon footprint. And although there will be an initial outlay on your part, you should reap the financial returns within just a few years.
But where should landlords begin when it comes to improving the energy efficiency of a property? James Tanner, energy efficient homes expert and landlord of 15 years, explains:
“The starting point is to implement all the measures which cost nothing. Why not - there’s nothing to lose. Then carry out all the measures which are low cost. Do as much as you can. Also make a list of the things that cost nothing to give to the tenants. For example, most boiler manufacturers provide an app you can share with tenants which explains how to control the heating, so they only have it on A, when it’s cold and B, when they’re home.”
In this guide, we’ll explain what you need to do to make sure your property complies with the law, both now and in the future, and that it’s as eco-friendly as possible, so you’ll have no shortage of tenants who’d love to make it their home.
An eco home is, in simple terms, a property that has a minimal impact on the environment.
The best eco homes have been designed and built using the most sustainable materials, then fitted out with the latest energy-saving devices so they require minimal energy to run.
Of course, most landlords aren’t letting brand-new eco homes!
But there are plenty of options out there to help you make the kind of changes to your property that would improve its carbon emissions and ecological impact, while complying with the law and meeting tenants’ needs.
Solar panels, modern appliances, new insulation and smart home technology can all improve your property’s ‘green’ credentials and appeal, while reducing your tenants’ bills – a win-win situation.
Tenants want a home that’s warm, comfortable and cost-efficient to keep that way. But there are also an increasing number who want to make sure they’re keeping their carbon footprint as low as possible and conserving resources for the good of the planet.
Climate change is a particular concern for millennials, up to a third of whom could be renting indefinitely.
According to one private rented sector tenant survey, 42%of tenants say they take a property’s environmental credentials into account when making a decision about where to live – rising to 50% for tenants in London. Among high-rent tenants paying between £1,350 and £1,600 a month, this figure increases to 63%.
In another survey, of 1,000 25 to 40 year olds (half homeowners, half renters), 49% said they would be more likely to buy or rent an eco-conscious home.
When asked if they would be prepared to pay more for sustainability features, 28% said they would pay up to 20% more and 22% would pay a premium of up to 30%.
James Tanner adds:
“Where we are today is that tenants are starting to make choices based on a property’s energy efficiency. They’re very conscious of the cost of energy bills and they are asking how much they are, and what energy efficiency measures have been installed. So, for landlords, the more efficient you make your property the more demand you’ll have, the more rent you’ll achieve and the less void periods you’ll have to deal with.”
So, if you’re trying to attract high-income tenants, young professionals or eco-friendly renters, it’s time to focus on how you can make your property more energy efficient.
Making your rental property eco-friendly is something that you’re going to be hearing about a lot more over the coming months and years.
Firstly, there are the current laws in England (as at November 2023) that you need to abide by. That’s principally not letting a home unless it has an EPC certificate of ‘E’ or above – and this applies to both new and existing tenancies.
If you fail to meet these requirements now and your property isn’t exempt, you could end up with a fine of up to £5,000.
Although, as mentioned, the Government has done a U-turn on plans to introduce a minimum EPC rating C for all tenancies, if you’re planning to make any renovations to a rental property now or in the near future, it would still be a good idea to work out what more you could do on the energy efficiency front to bring your property up to An EPC rating C rating so that you are prepared should the plans be reinstated.
Doing this will have the added advantage of reducing your tenants’ utility bills, meaning they will have more money to pay your rent and will hopefully stay in the property for longer. Always try to think of eco-friendly upgrades to your rented property as an investment with a return, not just a cost.
For example, a report by Sustainable Homes on social housing, found that improving energy efficiency could also benefit landlords by reducing rental arrears and voids.
Cold homes, on average, had two more weeks of rent arrears each year, compared to more efficient homes.
And the research also showed that voids reduced as homes got more energy efficient, with 31% fewer voids in properties rated ‘B’, compared with those rated ‘E’ or ‘F’.
Read more on the current Minimum Energy Efficiency Standards (MEES).
We’ve mentioned EPCs already, but what exactly is an ‘Energy Performance Certificate’? The EPC is a document that confirms the energy efficiency rating of your property, makes recommendations for things you could improve and gives you a rough idea of how much those improvements will cost.
A qualified Domestic Energy Assessor visits your property and reviews various aspects, including:
They will then calculate the property’s energy efficiency and rate it on a scale from A to G, with A being the most efficient.
The certificate shows the current level of efficiency and the rating that could be achieved if improvements were made. It also includes other important and useful information, including:
EPCs are valid for 10 years. If you can’t find your current EPC, you can search the registers for England and Wales, Scotland and Northern Ireland.
If your property is rated ‘F’ or ‘G’, you need to make improvements to bring it up to a minimum ‘E’ rating before you can let to a tenant.
For many landlords, only small changes may be needed to reach an ‘E’ EPC rating. A report published by Parity Projects for the UK Green Building Council suggests that the energy efficiency of a property can often be improved for £2,500 or less.
Your current EPC is a good place to start. It lists the top actions you could take that would make the greatest difference to the property’s energy efficiency and also gives you a detailed breakdown of some recommended measures, costs, savings and the difference that each measure could make to the property’s energy efficiency rating.
Three of the most important things to check are:
Essentially, the more efficiently you can generate heat to the property and the less chance there is of that heat escaping, the better your EPC rating will be.
And remember, not only could these changes help to improve rents and reduce voids, but they can also add value to your property. That might give you the option of refinancing and improving your loan to value, which could reduce your mortgage interest rate and monthly payments.
It’s worth knowing too that it’s not just landlords being asked to improve the energy efficiency of their properties – mortgage lenders are being targeted too. A 2020/21 consultation by the Government looked at how the energy performance of residential properties could be improved through obligations on lenders.
This is leading to lenders offering higher loan to value products, lower fees or even better rates, all to attract more properties onto their books that have EPC ratings of ‘A’ to ‘C’.
The newer a property is, the more energy efficient and eco-friendly it’s likely to be. On the other hand, the older a property is, the more work you’re going to have to do to bring it up to the required minimum standard and the more challenging eco-improvements could be.
Around 56% of private rented housing stock in the UK was built before 1965 and almost a third of it before 1920, so there are a lot of properties that would be considered ‘older’ – Victorian and Edwardian terraced and semi-detached homes, for example.
And one big issue with older properties is that they can be notoriously inefficient.
Draughty doors, single-glazed windows and old roofs with little insulation often lead to high energy bills and have an increased impact on the environment – all of which can lead tenants to choose more modern properties over older ones.
Although it can be a little trickier to retro-fit older properties due to the limitations of the property construction and layout (not to mention some of the building materials), there are plenty of things that landlords can do to make them more energy efficient and appeal to eco-friendly tenants.
You might not be able to transform a Victorian semi into a top eco home within budget, but you can dramatically improve the energy efficiency of the entire building through proper insulation, installing double glazing throughout and opting for modern fittings.
If there’s a lot to do, it’s advisable to work with a building partner who specialises in older properties, and don’t forget to look into whether you need planning permission before you start any work.
With all that said, here are the top five steps you can take to make any property more energy efficient:
Damp is a common problem in old properties. If it’s not addressed, it can lead to mould forming, which is bad for your tenant’s’ health and can cause damage to their home and belongings. It can also make the property colder, as damp walls conduct heat, which can sap the warmth from the room.
If the damp is forming at the bottom of walls on the ground floor, it’s likely to be rising damp. You’ll need to arrange for a specialist damp company to assess it and may need to install an up-to-date damp-proof course. The cost will vary significantly according to the size of the job, but the average is in the region of £800.
If it’s penetrating damp coming through other parts of the walls, that’s usually caused by rainwater seeping through the brickwork – often as a result of broken guttering and/or cracked brickwork. In that case, a contractor should be able to fix it fairly easily.
Landlords should be aware that it’s their responsibility to deal with damp and mould, regardless of who might have caused the problem in the first place. The Government issued new guidance on 8 September 2023 aimed at making sure both social and private sector landlords have a thorough understanding of their legal responsibilities.
Top tip from energy efficient homes expert, James Tanner:
Some tenants are reluctant to open windows to ventilate the property as they worry that this will increase energy bills. To help prevent damp and mould without having to open the windows, install two passive air vents on each floor of your property - these have fabric inside them to let moisture out but stop cold air coming in. A well-positioned air brick will reduce the build-up of moisture and condensation from settling, which protects against damp and mould inside a building.
The more routes warm air has out of your property, the less energy efficient it’s going to be, and air can get in and out of an older home in all sorts of ways, through:
And it’s not just about warmth escaping. Air moving around a property can make it feel a lot colder than it is, meaning your tenants will probably want to heat it for longer. All in all, a draughty property is a lose-lose for energy efficiency!
So, aim to install double-glazing, make sure doorways and windows are properly sealed and consider carpeting or replacing older wooden floors.
However, if the property is listed, some doors, windows, floors and fireplaces may be protected – and you want to make sure any upgrades are sympathetic to the original building – so it’s worth speaking to a specialist in the renovation of older properties and taking advice before you begin any works.
Top tip from energy efficient homes expert, James Tanner:
You can avoid wasting energy and encourage tenants to manage the heating system in the property by installing smart radiator thermostats with the window detection enabled so that when the window is open the heating adjusts or turns off automatically.
Around 20% of a home’s heat is lost through its roof and another 10% through the floor, so draught proofing and insulation are essential to keep heat in.
Modern insulation can be installed under the floor and in the roof or loft (depending on the amount of space and access you have). If the property has cavity walls, insulation can also be installed in the gap between the two external walls.
While it’s important to take steps to draught proof and insulate an older home, you do need a degree of ventilation to make sure the property doesn’t become damp. Again, check with a specialist before you start – the last thing you want to do is create additional problems.
Top tip from energy efficient homes expert, James Tanner:
Loft insulation is relatively inexpensive so if you own the loft in your property, it’s something that doesn’t cost much to install, will reduce heating bills by up to 25% and improve your EPC rating, while helping save the planet.
Tenants may love the character and charm of an older property, but they still want everything to work properly – especially the heating and water supply!
Installing a modern boiler is a key part of achieving the mandatory EPC rating of ‘E’ or higher, so if you haven’t already done so, it’s time to replace your old boiler with a more energy efficient model. If the property you’re letting is large, you might want to invest in pipe insulation (or lagging) to keep water warm as it moves around the house.
Top tip from energy efficient homes expert, James Tanner:
Adjust the temperature that heating goes round the property, for example try reducing it from 80 degrees centigrade to 60 degrees centigrade. This helps you and also keeps the cost of the bills down for the tenant. Visit James’s website for his top ten tips to reduce energy bills.
If you are looking at a new heating system over the next 10 years, it’s worth considering fitting an alternative – particularly as the Government is aiming to phase out gas boilers by the mid-2030s. Developers have already been told they cannot fit gas boilers in their new homes from 2035.
Here are a couple of other heating options to consider:
Solar panels with battery storage are cheaper to install than they used to be. In fact, the cost has reduced by 60% since 2010. But they’re still a considerable outlay, costing around £5,000 – 8,000 for the average home.
Nevertheless, as long as the property has a south-facing roof, you could see a reduction in energy bills of 40-50% for the year. So, if you can justify the up-front investment, solar panels should pay for themselves over time – plus you’ll be earning pocketfuls of green brownie points and you can also get capital allowances.
Heat pumps are a very energy efficient alternative source of heating for your home. In Sweden, they’re actually the most common form of heating device. And in the UK, under the Government’s ‘Green Industrial Revolution’ plans, they’re aiming to increase the number of heat pump installations from 55,000 a year in 2021 to 600,000 heat pump installations per year by 2028.
The system generates heat outside from the air, ground or water, then the pump uses a small amount of electricity to compress the heat – ready to be used for space heating and hot water. For every unit of electricity used to draw in heat, it creates three units of heat.
Air source heat pumps are the cheapest, at around £6,000 to £8,000, while ground source pumps can cost between £10,000 and £18,000, depending on how much heat is required.
Top tip from energy efficient homes expert, James Tanner
The ideal scenario to future proof a property, reduce bills, improve your EPC and save the planet is to install a heat pump and solar panels. If you have both a heat pump and solar panels, you are powering your heat pump from light, so you get free electricity and free energy to power that heat pump, so having the two is a great combination. The heat pump could be air, ground or a water source heat pump. You may also be able to take advantage of a cheap energy tariff and use cheap energy stored on your batter to power the heat pump.
Once you’ve got the main fabric of the property dry, airtight, insulated and well-heated, you’re most of the way there. However, the fixtures and appliances that you install can have a big impact on your tenants’ energy usage – and the quality of tenant you attract.
Manufacturers have invested in making dishwashers, washing machines, fridges and freezers much more energy efficient. So, upgrading your white goods to ones with a good eco-rating should help your tenants bring down their energy usage.
In the bathroom, modern ‘low flush’ toilets, especially those with dual flush options, can bring water usage down by as much as 50%. Similarly, installing an eco-shower head can reduce the amount of water you use by 20%.
And LED lightbulbs use much less energy than standard bulbs, plus they last longer. They’ll slot happily into the same fittings as their predecessors and are easy to find in most shops that sell traditional lightbulbs.
Making your rental property more energy efficient will require an injection of time and money, but not only is it necessary to comply with the law, it’s also an increasingly worthwhile investment to make sure it always lets well.
As tenants are becoming more and more environmentally focused, if you don’t move with the eco-times, you risk getting left behind in an ever-improving rental market.
Top tip from energy efficient homes expert, James Tanner:
Cooking and showers can create a lot of steam, so it’s a good idea to put a humidistat in bathrooms and kitchens. They’re not linked to a light switch but have a sensor in them that detects moisture in the air. Whenever they detect steam, they’ll suck it out, automatically reducing the amount of moisture in the air.
As more and more tenants are interested in living an eco-friendly life, demand is increasing for properties that have a garden or other outdoor space.
If your property has a garden, you can make it more eco-friendly and sustainable by creating a wildflower area for bees and butterflies, planting some fruit trees and giving tenants a bed where they can grow their own herbs and vegetables.
If there is only a small patio or balcony, put out some potted plants and shrubs and tell prospective tenants that you’ll be happy to provide them with planters/troughs if they’d like to grow some produce. If there is no outside space at all, you could even look into whether there are any available allotments close by.
If you have a garden, providing a composting bin is another low-cost way to help your tenants do something useful with their food waste and reduce their environmental impact.
Most councils will provide a basic compost bin for around £25, or you could explore the huge range of options out there and buy your own – they start at around £40.
Government funding is available to reduce our impact on the environment, and energy suppliers and local authorities all provide grants to help save energy. Landlords in Scotland can borrow up to £100,000 interest free with a Private Rented Sector Scotland Loan, which is funded by the Scottish Government to help landlords make energy efficiency improvements.
This scheme was introduced in April 2022 to encourage homeowners and landlords in England and Wales to scrap gas boilers and replace them with a renewable heating source.
The following grants (one per property) are available to help property owners with the upfront cost of installing low carbon heating technologies.
You can get one grant per property. Current grants are available for:
Before you consider this option it is crucial to get a professional to carry out a heat loss calculations report on your property to work out the amount of heat needed to keep your property warm, for details see: www.jtannerproperties.co.uk.
The grants for heat pumps went up on 23 October 2023. If you applied before 23 October and your installer has not fitted your new heat pump yet, the Government advises you talk to them about cancelling your grant and reapplying to get the increased amount.
You need to use an MSC certified installer, who will apply for the grant on your behalf and then take it off their final bill.
For more information and to find out whether you might be eligible for a grant, visit GOV.UK and the Energy Saving Trust.
Energy Company Obligation (ECO) and the Great British Insulation Scheme
This is an obligation placed on energy companies to support energy efficiency improvements, including insulation and some heating improvements, but it’s only for low income and vulnerable households, or properties with an EPC of D or lower.
You can check whether you might qualify and see the latest offers from suppliers on the Simple Energy Advice website.
Smart Export Guarantee (SEG)
If you use solar panels or other renewable sources to generate electricity for your property, you can sign up to the Smart Export Guarantee tariff with an energy company. Under this scheme, you get paid for any excess electricity you generate and feed back into the National Grid.
You should be able to sign up to an SEG tariff as long as:
See the latest deals from suppliers on the Solar Energy UK website.
Here’s our round-up of all the things you can do to give green-minded tenants their dream home:
⬜ Make sure your property has an EPC rating of ‘E’ – and ideally ‘C’ or higher
⬜ Find out what you would need to do and how much it would cost to get it to an EPC C rating
⬜ Insulate the walls, floor and roof
⬜ Install double glazed windows
⬜ Install smart, eco-friendly appliances
⬜ Have low-flush toilets and water-saving shower heads
⬜ Upgrade the boiler
⬜ Install energy-efficient heating solutions
⬜ Upgrade all light bulbs to LED
⬜ Make the outdoor space eco-friendly
⬜ Provide a composting bin
Sustainability isn’t just about reducing our impact on the environment, it’s also cost-effective, making it a win-win for both you and your tenants. For more details see: www.jtannerproperties.co.uk
“The younger generation is more environmentally conscious and want a home to be as efficient as possible, both financially and in terms of saving planet. Global warming is getting worse, and a lot of that comes from buildings and homes. With buildings making up 21% of our housing stock, it’s very important that landlords do as much as they can. We have a huge amount of power and can make an enormous difference if we want to, and I really think we should.”
James Tanner
With the rental market as tight and competitive as ever, investing in energy efficiency and sustainability is a great way to make your property stand out from the crowd. For practical advice to help you make informed decisions about how to future proof your home and attract the best tenants during a cost of living crisis, tune in to our podcast on navigating soaring energy bills and the cost of living crisis, with energy expert, Rik Smith.
Hopefully you’ve found our guide to eco-friendly property adaptations useful. If you have any questions on anything that we’ve discussed or you have any suggestions for other things landlords can do, drop us a message on Twitter (X) or LinkedIn and let us know.
To keep up to date on the rules around energy efficiency in rental properties and other property news, sign up to our news partner, LandlordZONE.
And you can watch LandlordZONE’s webinar, ‘What’s next for energy efficiency in rental properties?’, hosted by LandlordZONE’s Head of Content, Nigel Lewis and guests, energy efficiency expert, James Tanner and Chris O’Donnell, Head of Data Analytics at Utilita, for more tips and advice on how to make your rental property more energy efficient.
