In 2020 the UK government announced that private rentals would need to meet higher energy efficiency standards and began a year-long consultation on the proposal. Despite calls for updates and concrete deadlines from landlords, tenants and energy-saving campaigners, no significant updates have come from Westminster since the end of the consultation period.
There are plenty of opportunities to use this conversation to improve the tenant experience and make properties work harder, despite the uncertainty while we wait for a government decision.
Let’s recap. Here’s the original timeline:
Around 14% of the UK’s carbon emissions come from buildings, and increasing the efficiency of privately rented homes could make a significant impact to this figure. Here’s the timeline for government announcements and initial dates.
2020: Government proposes higher minimum EPC ratings for private rentals, proposing a new minimum of EPC C.
2021: Consultation on proposal ends
2025: The proposed deadline for all new lets to be at least EPC C
2028: The proposed deadline for all private rentals to meet at least EPC C
But since the end of the consultation period on the proposal in 2021, property professionals, tenants and environmental campaigners have waited for updates that have yet to materialise.
This is an obvious source of concern for landlords who, without a deadline, can’t plan or budget the time and expense involved in making the necessary improvements to their portfolio.
An EPC rating is a measure of how much energy a property uses per square meter, with a property rated A using the least, and a G-rated property using the most.
Energy efficiency in the UK’s private rental sector
The UK’s rental housing is some of the least energy efficient in Europe. Apart from contributing to the UK’s carbon emissions, energy efficiency can lead to structural problems like mould within properties.
Low energy-efficiency ratings are a deterrent for tenants too, and it seems this will only increase as younger generations begin to make up more of the rental market. Research by Shawbrook showed that 72% of tenants aged 18-34 say they always check the EPC of a property before renting, compared to only 52% of those aged 55+. Different research by Legal & General Capital showed that sustainability in a home is becoming more important than the size of the property for tenants.
A low EPC rating ultimately makes it harder to fill a property and creates a worse tenant experience with high energy costs making it less likely that tenants will stay at the address.
Clarity from the government on when EPC improvements are needed would benefit tenants and landlords. The lack of a solid deadline means landlords are left in limbo, without any idea of when they may need to invest significant time and money into increasing their properties’ EPC ratings.
Tenants are also losing out, with figures from the Energy and Climate Intelligence Unit estimating that tenants will pay more than £1 billion in additional energy bills based on a two-year delay to the plans.
Downsides for landlords and tenants
Tenants in draughty, poorly insulated flats face much larger heating bills to stay warm and comfortable. The reality of the cost of living crisis is that tenants often go without so they can stay within their budget. This is one of the most obvious examples of a poor tenant experience caused by an inefficient property, with issues like mould developing if rooms are heated inconsistently (or not at all). Ultimately the landlord will also need to deal with the long-term implications of an inefficient building.
Inefficient properties exacerbated the huge difficulties faced by agents and landlords during the energy crisis, too. Bills-inclusive rentals were a huge source of financial stress for those offering bills-inclusive options at a fixed price, only to see the actual energy costs far exceed the payments made by tenants over the course of a few short months. This left those managing the properties badly burned, and the problem was worse in energy-inefficient properties which naturally use more energy to stay warm.
Is Unlimited Energy the stop-gap solution for landlords and tenants?
Increased energy efficiency is a medium-to-long-term goal – improving a property’s EPC rating is an investment of time and money which can’t happen overnight. In the meantime, a solution has to be found that means tenants are able to stay warm, and landlords and agents can rest easy knowing properties won’t fall into disrepair or be unnecessarily difficult to let.
An Unlimited Energy deal (sometimes called an Uncapped Energy Deal) works like an unlimited mobile contract. It allows tenants to use all the energy they need, without the fear of overuse charges. Their payment doesn’t change in response to their energy usage, meaning they use energy according to their needs, not their budget.
For those who own or manage a property, this means no cold rooms and no mould to deal with, as well as happier tenants.
Unlimited Energy isn’t available directly from suppliers but is offered by bills package suppliers like One Utility Bill.
What’s a bills package?
A bills package puts all household bills into one monthly payment, offering a choice of services, which the tenant can pick and mix themselves, as well as other perks like Unlimited Energy.
A bills package also offers some of the convenience of a bills-inclusive rental, with all utilities coming out in one monthly payment so finances are easier to manage.
Can one free service introduce more tenants to Unlimited Energy, as well as saving agents time and making them money?
Yes. One free service can do all of that, and it could be the ideal stop-gap solution while we wait for clarity from the government.
The Notify service by One Utility Bill saves agents hours of admin time by automatically notifying utility suppliers of tenancy changes. It also pays agents £10 for every new tenancy submitted. Reapit users have an even easier time because Notify automatically updates suppliers of all tenancy updates submitted via Reapit, and automatically pays commission too. Once they’ve been set up, all Reapit users need to do is log in to Notify to claim their commission
That £10 per new tenancy soon adds up. The average Reapit user who adds One Utility Bill’s Notify from the Reapit AppMarket makes £2,400 a year, assuming 20 lets per calendar month.
Okay… but how does this help tenants get Unlimited Energy?
Every new tenant submitted to One Utility Bill via the Notify service gets a welcome call from the team to make sorting utilities easier, covering three points:
- The current utility suppliers at the address
- Supplier options for switching
- They get the option of an Unlimited Energy One Utility Bill package
Tenants have zero obligation, and even if they don’t go for a One Utility Bill package, agents still get £10 commission. Think of it like a referral bonus for the chance to speak to new tenants.
Tenants get easy bills options, and agents save time and make money just by using Reapit as usual.
Reapit agents who sign up for Notify will get double commission for three months. Book a call with the team to get started, or check out Notify on the Reapit AppMarket.