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Blog Series: Dear Prime Minister to be… [3: Energy Efficiency]

Article Posted - 20th November 2019


Dear Prime Minister to be… 

As the country gears up for the General Election, we are calling on the newly elected Prime Minister to take a strategic approach to the private rented sector, and address issues which affect landlords' ability to plan and run effective businesses. 

Uncertainty is the enemy of investment and the inability to plan for the future has led to landlord confidence reaching an all-time low. The next government must recognise the value the majority of landlords offer – and ensure criminals in the sector are removed. 

They need to take informed policy approaches to the key issues of possession, taxation and energy efficiency, to harness the value of the private rented sector effectively and avoid unintended consequences in making renting harder to access for tenants. 

Investing in greener homes 

The UK has committed to net-zero carbon emissions by 2050, but a step-change is needed across sectors to meet this target. 

More than a third of privately rented housing was built pre-1919.  These properties are significantly more costly to bring up to minimum energy efficiency standards than newer builds. The Committee on Climate Change estimates that the average landlord will need to pay £26,300 over the next 30 years to bring their properties up to carbon neutral status.  

The next Government needs to address this issue and incentivise landlords to not just meet the minimum required, but to plan ahead to the net-zero goal and make properties as energy efficient as possible. 

We therefore call for the reintroduction of the Landlords' Energy Saving Allowance (LESA) – allowing landlords to offset energy efficiency improvements against income or corporation tax – with an increased threshold, in order to leverage private sector finance to meet the zero-carbon challenge.  

Allowing all landlords to take advantage of LESA could see tenants across the whole sector benefiting from warmer homes now, instead of waiting five or more years for further regulations. 

Building passports 

One of the challenges which landlords face with the current Energy Performance Certificate process is that the EPC assessment is solely visual. If a landlord or previous owner has installed energy efficiency measures, such as wall insulation, unless there is evidence of the installation, this will not contribute to the EPC rating of the property. This means that new owners may be unaware of the fabric of the building and the opportunities to increase energy efficiency. 

A building passport, which details the changes made to the property and outlines what changes can be made progressively to meet the maximum energy efficiency rating possible, would help owners to plan the upgrades to their property over a period of time. This would mean that owners could plan for energy efficiency improvements to be included in maintenance and refurbishments, allowing future-proofing of properties. 

With a target for net-carbon committed to, the next government needs to show leadership in providing a clear trajectory for property owners to meet – to provide greater certainty for investors and encourage long-term planning. 


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