Energy efficiency and condition standards in private rented housing: consultation analysis

Linking the standard to the Energy Performance Certificate (EPC)

It is proposed that the standard should be linked to the EPC system. This was proposed because landlords and tenants should be familiar with the document and the assessment method, as EPCs are already required at a change in tenancy. The rating system is also currently used for setting standards that apply to socially rented housing.

Question 1.2 - We propose to link the minimum energy efficiency standard to the energy performance certificate as we think this is the most suitable mechanism. Do you agree?

If you answered no: (a) please explain why; and (b) please set out your suggestions for how we could set the standard.

Table 3: Question 1.2 – Responses by type of respondent.

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector	4	1			5
Landlord	11	12		5	28
Letting agents etc.	6	3	1	2	12
Local Authority	19	1	2		22
Other	1			3	4
Professional body	15	3	1	7	26
Third sector	9			2	11
Total organisations	65	20	4	19	108
% of organisations answering	73%	22%	4%		100%
Individuals	44	36	2	8	90
% of individuals answering	54%	44%	2%		100%
All respondents	109	56	6	27	198
% of all respondents	55%	28%	3%	14%	100%
% of all those answering	64%	33%	4%		100%

A majority of respondents, 64% of those answering the question, agreed that the minimum energy efficiency standard should be linked to the energy performance certificate. Individual respondents were less likely to agree than those from organisations (54% and 73% respectively).

There were around 115 comments on Question 1.2. Amongst respondents who answered No, a small number restated opposition to further regulation of the sector while most set out what they saw as failings or limitations of the current EPC system. The most frequently-stated opinions were that:

• The system is unclear, too subjective, flawed/inaccurate or inconsistent and does not always reflect the actual thermal performance of a property.
• The process is not fit for purpose for older properties with solid walls. Different standards/assessment methods are required for older, traditionally constructed and listed buildings.

These points were most likely to be made by Individual and Landlord respondents.

The majority of respondents who answered Yes at Question 1.2 made no further comment. Others expressed a view that the proposed approach is sensible or reasonable, and that the EPC system is the best mechanism available at present. Advantages cited included that the EPC system is familiar and easy to understand, cost-effective, nationally recognised, and is the approach used by the Energy Efficiency Standard for Social Housing, allowing comparisons to be made between sectors. However, some respondents who agreed the EPC is the most suitable mechanism also highlighted their concerns that they consider the current system is flawed, limited or inaccurate and it was argued that such concerns must be addressed to create confidence.

Otherwise at Question 1.2 similar points were raised by respondents irrespective of their answer to the Yes/No question. These comments tended to either raise what respondents saw as failings in the EPC system and/or make or suggestions for improvement and are set out in turn below.

Methodology

Some respondents felt that the EPC methodology should be updated or improved and kept under review to ensure it reflects changes in technology, such as battery storage and infra-red heating.

The use of the Reduced Standard Assessment Procedure ( RdSAP) was questioned and it was suggested that it should be reviewed or replaced with the more detailed Standard Assessment Procedure ( SAP). There was also concerns around the data modelling employed and that real and modelled energy consumption can be very different, with the greatest divergence in buildings that do not conform with the assumptions used in the BRE Domestic Energy Model ( BREDEM).

As noted previously, many respondents opposed to use of the EPC pointed specifically to problems they saw with assessments of traditionally built properties, and suggested that the standards set are not realistic for traditional stone built buildings with solid walls, particularly in rural areas. Respondents described their own experience of significant works resulting in only marginal improvement in the EPC rating, or highlighted anomalies in ratings achieved by apparently similar buildings.

A number of the assumptions made during the assessment process were also questioned. There were particular frustrations that assessors will not accept that insulation is present if they cannot see it and that some modern insulation methods may be counter-productive for older properties – for example increasing damp if ventilation is reduced. In some circumstances, it was suggested that improved property management could be more effective than installing insulation.

Development of a Scottish model, using real energy consumption data and other measured data on the performance of Scottish building types in different Scottish climates was proposed. It was argued that:

• Improvements suggested and the costs of carrying out such works must be more realistic.
• It should be possible to make allowances for specific local factors – such as a private water system with pressure too low for combi boiler to be installed.

Fuel sources and prices

As running costs are a factor, it was suggested the EPC rating is not a reliable measure of energy efficiency in largely rural areas where there is no mains gas and the alternative fuels available are more expensive. It was suggested being off-gas grid will lower a property score by one or two grades, while falling fuel prices can result in improved EPC ratings when no improvements to the environmental performance of the building have taken place. Rural homeowners may also not be eligible for advantageous incentive schemes or tariffs because their homes do not achieve a D EPC rating.

Also with reference to heating methods it was noted that:

• Benefits of district heating systems are not recognised by the present assessment method.
• Heating options that improve an EPC may not be preferred by the tenant.

With respect to the fuel poverty threshold calculation, it was suggested that, if the aim is to reduce fuel poverty, the proportion of net disposable income against actual energy consumption is a more accurate measure and that the EPC's ability to account for the carbon and fuel poverty impact of a property and to set a clearer route for improvements should be enhanced.

Comparability

Respondents commented on the importance of being able to compare ratings including that: there should be a consistent approach across the private and social housing sectors; if the current methodology is changed it may not be possible to compare old and new EPCs; and that a minimum E rating will be needed to let property in England from April 2018. However, it was also suggested that assessment of similar buildings in England and Scotland will produce a poorer rating for the Scottish property as climatic conditions are taken into account.

Respondents also expressed views that standards of EPC surveyors and the EPCs produced can vary at present, and that the new requirements may lead to a shortage of properly qualified EPC assessors or that the retraining of assessors could be lengthy and expensive.

Validation periods

With respect to the length of the validation period it was suggested that, as the certificate currently lasts for 10 years, a landlord should be asked to confirm that the property has not changed. Alternatively, the validation period should be reduced to 3 years as survey data and calculation methodology will have changed.

Monitoring and regulation

It was suggested that there should be penalties for procuring or providing a false or deliberately misleading EPC. Further points made included:

• There is no system of quality control on the improvements carried out.
• There should be some form of appeals or adjustment process.
• New research on levels of awareness and understanding of EPCs would help inform engagement and the advice provided to support compliance.

Alternative suggestions

Although most respondents focused their remarks at Question 1.2 on perceived problems associated with the existing EPC system and how these might be corrected, a small number suggested alternative or additional approaches. These included:

• A measure based approach based on minimum thermal standards ( e.g. for loft insulation or cavity wall construction) and a minimum standard for whole house heating provision and unwanted ventilation heat loss.
• Use of thermal imaging.
• Operational assessment of actual energy use, which would also motivate and empower individuals to take ownership of their energy use.

It was also suggested that, with appropriate resources, Local Authority Housing Services could offer EPCs and commission work in a similar manner to mutual repairs.

Question 1.3 - Do you think there are elements of the energy performance certificate assessment that would need to be altered to support a minimum energy efficiency standard?

If so, what areas do you think would need to be changed and what evidence can you offer to support your view?

Table 4: Question 1.3 – Responses by type of respondent.

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector	2	2		1	5
Landlord	17	2	3	6	28
Letting agents etc.	6	3	1	2	12
Local Authority	6	8	8		22
Other	1			3	4
Professional body	9	2	4	11	26
Third sector	5	3		3	11
Total organisations	46	20	16	26	108
% of organisations answering	56%	24%	20%		100%
Individuals	51	15	16	8	90
% of individuals answering	62%	18%	20%		100%
All respondents	97	35	32	34	198
% of all respondents	49%	18%	16%	17%	100%
% of all those answering	59%	21%	20%		100%

A majority of respondents, 59% of those answering the question, thought that elements of the energy performance certificate assessment would need to be altered to support a minimum energy efficiency standard. Individual respondents were more likely to agree than those from organisations (62% and 56% respectively). A majority of local authority respondents did not agree.

There were around 120 comments at Question 1.3. Respondents who answered No made limited further comments, but their remarks at earlier questions indicated that some were generally opposed to the principle of introducing an energy standard, while others were broadly supportive of the EPC system in its current form.

In contrast, some of the comments made by respondents who agreed that elements of the EPC system need to be altered were extensive but often reflected issues raised at Question 1.2. Some respondents referred back to their comments at Question 1.2 or reiterated views on the need to address current limitations of the EPC system including assessment of older buildings or rural properties; experience of varying standards of quality and consistency in the assessment; the need to reflect new technologies and renewable energy; the need to reflect actual energy use; the conditions and maintenance of the property and how well any insulation or energy improvement measures have been fitted. Other general criticisms included that the system is perceived as neither transparent nor accountable.

Suggested additions or changes to the EPC

A number of respondents suggested features that should be added to the existing EPC system including:

• Identifying the increase in rating expected from each recommended individual measure and providing a much wider range of choices and points allocations to allow owners to consider all available options.
• A website with Frequently Asked Questions, helpline, virtual reality houses, etc. to improve understanding of the RdSAP/ EPC system.
• Indicating if a property is listed, if planning permission is required to implement suggested changes, if house is considered "hard to treat", and if substantial energy improvement work has already been done by the landlord.
• Indicating where simple solutions have been applied, such as heavy curtains in listed buildings in combination with draught proofing windows.
• Making clear that where a statutory minimum standard applies it is compliance with the standard that is required, not simply carrying out a list of works that may assist in meeting the standard.
• Setting out measures to improve the standards above the minimum and a clear pathway to achieve these. It was suggested this could encourage landlords to make further improvements when costs would not be excessive or where it may be cheaper to carry out improvements at the same time rather than having to undertake further work in future.
• Adding a 'compliance with legislation' check on the certificate for ease of reference for tenants, landlords, letting agents and local authorities.

Amongst other changes suggested were that only those parts of the EPC relating to the structure of the house should be considered and that recommendations should relate to energy efficiency rather than to using lower carbon energy sources or renewable energy. Several respondents made specific reference to issues concerning treatment of electric heating while others commented on specific technical details not handled well by the existing system.

Reduced Data Standard Assessment Procedure ( RdSAP)

In particular, a number of respondents identified issues they saw with the RdSAP or SAP systems used in EPC assessments. Comments included:

• The RdSAP/ EPC system was developed as a method for reporting energy efficiency levels not to be a regulatory tool to improve energy efficiency.
• Many measures that contribute to energy efficiency are not taken into account.
• This is a complex area requiring expert opinion, and a review could be the subject of a separate consultation. It should not be rushed.
• There should be direct engagement with assessors and the software developers.
• The RdSAP system could be enhanced by allowing the assessor to give advice to the tenant in the form of an occupancy evaluation.
• The system needs to be made more flexible to hold core data for each house, that can be referred back to as additional improvements are made, without incurring the full cost of a complete re-survey and new EPC.
• The quality assurance systems run by the RdSAP software developers rely on photographs taken by the surveyor rather than checks with clients, so measures that are not visible may not be credited.

Qualification of assessors

Perceived inconsistencies of application in the existing EPC system were sometimes attributed to the quality of assessors and their training. Suggestions to remedy this included:

• Minimum Standard Assessments should be carried out by suitably qualified professionals: chartered surveyors, architects or members of the Chartered Institute of Builders.
• Assessors should undergo ongoing Continuing Professional Development style training to refresh their skills and ensure they are up to speed with new developments.

Measures to prevent misuse of the system

Several respondents suggested that care is needed to ensure the EPC system is not manipulated to achieve a required minimum rating where there is a clear commercial benefit to attaining a particular rating. Suggestions included:

• A smart audit process for EPCs.
• An EPC assessor must visit and inspect the property as part of the process and, where the property is tenanted, the tenant must be advised when that inspection will take place.
• The EPC should be renewed each time a landlord re-registers for each of the properties they are renting out (and also at the point of registering for the first time).