The loophole leaving renters in the cold

Across England and Wales, hundreds of thousands of renters live in homes that are draughty, damp and cold. Due to a new loophole in housing rules, the government could be about to hand them a £1 billion bill instead of requiring landlords to improve the worst properties.

The situation

The UK has some of the draughtiest, leakiest housing in Europe. Each year we waste a massive £7.5bn on heat that simply escapes straight out of our windows, doors and floors. It’s bad for our bank balances, it’s bad for our health, and all that wasted energy drives climate change too.

The situation is particularly serious in the private rental sector where some landlords are unwilling to invest in improvements, leaving renters in cold, unhealthy living conditions.

From April 2018, new regulations come into force that make it illegal to rent out the leakiest homes - those with F and G energy performance ratings will need to be improved to at least an E.

The loophole

But there’s a catch.

If a landlord claims there is any cost to themselves for making the required improvements, they can exempt themselves.

A few years ago, this loophole didn’t look like such a big deal. Landlords had access to funding from public schemes such as the Green Deal and Eco (Energy Company Obligation). But since then the government have scaled back or scrapped these schemes, making the legislation effectively toothless.

The online exemptions opened at the start of October, and thousands of landlords are able to simply opt out of the new rules. According to the rules, these exemptions will last for five years regardless of changes in landlords’ circumstances. What’s more, landlords are able to self-certify their claims and providing evidence is explicitly optional. It is up to overburdened local authorities to check the validity of exemptions after they have been granted - many simply won't have the resources to do so.

Using the government’s own figures (1, 2 + 3) we’ve worked out this loophole could tot up to a £1bn energy bill for tenants over the next five years.. In contrast, over 70% of properties in question could be brought up to required standards for no more than £1,000.

Plus, government figures show that improving these properties would save 2m tonnes of carbon - making this all the more important to get right, for everyone’s sake

The solution

The simplest way of the closing the loophole would be to introduce a reasonable cost-cap. Up to a given amount (for example, £5,000) landlords would be expected to fund improvements out of their own cash (which in any case will increase the value of their property). This balances tenants needs with fairness for landlords.

Closing the cold homes loophole saves money, cuts carbon - and protects vulnerable tenants. Leaving it wide open risks leaving renters shivering in the cold with a £1bn energy bill.

Write to your MP and ask them to ensure we close the cold homes loophole as soon as possible.

The big picture

Getting the government to close this loophole is a great start, and an easy way to cut some of the UK’s carbon waste. In the long run though, we’ll need to go bigger. Energy efficient improvements to home heating, insulation, lighting and appliances could reduce the energy consumed in UK households each year by a quarter, and knock £270 off the average household energy bill of £1,100 – a saving that’s equivalent to the output of six nuclear power stations the size of Hinkley Point C. That’s some serious carbon cutting.

Fuel poverty leaves families in the UK choosing between heating and eating. Currently, 1 in 10 UK households are fuel poor, and that number rises to 1 in 5 in private rental accommodation. It’s not just older people that are affected by this issue. Single parents with dependent children are at the highest risk, with almost 25% in fuel poverty. That leaves 4 million children in the UK living in fuel poverty. This takes its toll on their lives, and costs the NHS a massive £27k a day. Closing this loophole and improving these properties will improve millions of lives.

If you want to dive deep - have a look at our in-depth briefing.

PS. We also took a giant loophole down the government's energy department and got a couple of 'landlords' to step through it...