Local authority selective licensing schemes, now increasingly being used by councils seeking to improve living conditions in their local private rented sector, can be a way of moving beyond the debate surrounding a recent byelection result (extensively covered elsewhere).

For the private rented sector (PRS) the current debate already has important implications the possibility of which we pointed to in our news item on last weekend’s Telegraph interview given by Michael Gove MP, the Secretary of State for Levelling Up, Housing and Communities).

Further statements made since our news item now seem to be making more concrete the possibility of a delay to the bringing into effect of more stringent domestic minimum energy efficiency standards (MEES) in the PRS which were planned to come into effect between 2025 (for new tenancies) and 2028 (for all tenancies).

Whatever one’s view (if a resident of London) on ULEZ, it could be argued that the debate is obscuring somewhat the fact that domestic energy efficiency improvements in the PRS are, and will remain, a first order priority. Fuel poverty, public health impacts, poor educational outcomes for children and the costs/benefits of retro-fitting properties aren’t abstractions. They have been attested to by the NHS, The Local Government Association, Chartered Institute of Housing, Chartered Institute of Environmental Health, The Building Research Establishment, Energy UK, The National Residential Landlords Association, Crisis, Shelter, National Audit Office, parliamentary committees, government research papers and more (as a sprint through our news/articles archive can show).

The UK has pretty much the oldest and draughtiest housing stock in Europe when compared to our continental peers and this stock is the source of a big chunk of our nation’s carbon emissions (not the same thing as the air quality problem that ULEZ is concerned with). On its own that is reason enough to have in place updated energy efficiency improvement plans, as anyone who has recently visited southern Europe or parts of northern Africa might attest to. However, the other issues that could be affected by a possible delay are fuel poverty and poor health with poor energy efficiency in the home being a significant factor in both.

If we step back and put heat pumps and their installation cost to one side (the Boiler Upgrade Scheme Voucher figures for May 2022 to June 2023 seem to show that take up, per 10,000 households, is still fairly low) as well as the target of banning all new gas boilers by/from 2035 (still 12 years away - even if not long in the great scheme of things) it is possible to find a path to some form of success, however incomplete .

If the problem is improving energy efficiency for a significant number (even if still small in national PRS terms) of households in the short to medium term then the immediate issue isn’t the relatively high cost (or appropriateness) of installing a heat pump under current economic and geopolitical conditions, it’s about proper insulation, an efficient gas boiler and good quality windows. Any well prepared PRS landlord should have these installed already (in what is, afterall, their ‘asset’) but, in certain local authority areas, this has been and is more problematic.

Areas that are, or may become, subject to selective licensing can be pathfinders in squaring this energy efficiency circle. Councils using PRS selective licensing as part of their strategic approach to housing (and ‘place making’) improvements are able to identify the poorly performing properties because submitting a current property energy performance certificate is part of the selective licence application process. A selective licence scheme also gives councils the power to carry out property compliance inspections of PRS properties in the licence scheme area.

With the data acquired via licensing a council can ensure that all the licensed landlords have access to advice on energy efficiency improvements (and available improvement grants) and can, or should, arrange for providers of ‘green finance’ products to attend at regular landlord forum events hosted by the local authority. As we pointed out in a previous article, Haringey Council, in its recent selective licensing proposal, estimated that there were 1,500 energy inefficient properties in its designated area with concomitant fuel poverty issues and Nottingham Council says that it has reduced the number of energy inefficient properties in its selective licence area from 47% of properties to 14% of properties since their scheme started (thus reducing fuel poverty).

The English Housing Survey 2021 to 2022 includes a section on the estimated average costs of upgrading a residential property, including PRS properties, to an energy efficiency rating (EER) of C - the section also provides some instructive estimates on carbon emissions savings for different property types. The figures suggest that the financing becomes ‘difficult’ only for the already worst performing properties that would fail the current minimum standard of an E rating - maxing out at around £15,000. Some PRS properties would cost less than £5000 whilst the average would be just over £7000.

So, if selective licensing can provide councils with the vital property information they need in order to achieve energy efficiency improvements and effectively reduce fuel poverty (and thus improve health outcomes and educational attainment as well as improve the value of landlords assets) does that help square the energy efficiency upgrade delay circle - even if not on a whole nation, all tenures basis? Delay or no delay, PRS landlords who need to should still be making effective plans to cope and local authorities with selective licensing schemes have ways to proactively help them.

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