Will the Green Homes Grant leave renters out in the cold?

Jul 30, 2020 12:45 PM

Earlier this month, the Chancellor announced £2bn of funding through a Green Homes Grant to insulate homes. Poor insulation is a huge issue for private renters: one in 10 of us live in a home that is unacceptably cold - that's twice the rate among home owners and social tenants.

But it's not easy to get landlords to make these improvements - landlords have no incentive to reduce energy bills that someone else pays, and tenants have no idea how long they'll live somewhere to benefit from better insulation. 

The recent English Housing Survey found that of 4.8m private rented homes, 459,000 – 10% - failed the Decent Homes Standard on thermal comfort criteria. While 834,000 owner-occupied homes failed the same criteria, this accounts for just 5% of the total of 15.3m such homes. Similarly, 180,000 social rented homes are unacceptably cold - 4% of the total.

The poor quality of private rented homes makes it expensive to heat them properly. Nearly one in five (18%) private renters is in fuel poverty and the End Fuel Poverty Coalition predicts that this proportion will rise as a result of the economic shock of coronavirus.

The Green Homes Grant was announced by Chancellor Rishi Sunak on 8 July to provide up to £5000 for measures to improve energy efficiency in owner occupied and private rented homes. To benefit private renters in proportion to the scale of the problem, at least £700m of the £2bn fund needs to improve private rented homes. 

But getting this money into renters' pockets in the form of lower energy bills is a challenge:

  • There's no carrot for landlords. A 2016 Generation Rent survey found that just 8% of private renters have their energy bills paid by their landlord and included in their rent.
  • There's also not much of a stick. 2019 Minimum Energy Efficiency Standards (MEES) regulations mean landlords with F- and G-rated properties are only obliged to spend up to £3500 on improvements.
  • Even if tenants are aware of the insulation needs, the benefit of asking for this is unclear when we have no idea how long we'll be living in the property. The lack of security in private tenancies acts as a further obstacle to retrofitting private rented homes - our 2016 survey found just 17% of private renters have asked for energy efficiency measures.

The government’s proposals to abolish Section 21 evictions will give private tenants more assurance that they could stay in their home long term and thus benefit by asking for energy efficiency improvements. But the Renters' Reform Bill promised in the Queen's Speech has not yet been published.

We can make sure the Green Homes Grant is designed with renters in mind. We have written to the Energy Minister Kwasi Kwarteng to ask him to include these measures:

  1. Promote the Green Homes Grant to private renters with an easy way to access their Energy Performance Certificate and identify potential improvements.
  2. Enable renters to request quotes from accredited installers and send these to the landlord, minimising the administration burden for the landlord.
  3. Ringfence part of the scheme’s budget for improvements to private rented properties, especially where those properties are occupied by people in or at risk of fuel poverty.
  4. Record the tenure of every property that benefits from the grants to aid assessment of the impact of the scheme on the private rented sector.
  5. Temporarily lift the cap for MEES to £8,500 to account for the £5000 available under the Green Homes Grant.

Landlords have been allowed to get away with letting out poorly insulated homes and as a result too many private renters cannot afford to heat their homes properly. The Green Homes Grant is a huge opportunity to rectify this, but nothing will happen unless the government makes it easy for renters to benefit and tells them about it. If renters are shut out of the process we’ll miss this chance to improve the quality of rented homes and reduce renters’ bills. here.

Do you find it hard to afford to heat your home in the winter? Contact us and help us keep the pressure on the government to act.


Photo by Bianca Ackermann on Unsplash