Engaging Private Landlords in Energy Efficiency Research Seminar One 2 October 2014
Engaging Private Landlords in Energy Efficiency – Seminar One
Introduction Jo Wilson
Head of Policy, Future of London
Future of London • Urban policy network: independent, member-based, non-profit • 35 public-sector members – LAs, HAs, GLA, TfL, social enterprise – and variety of private-sector partners • Capacity-building and connection for practitioners at all levels in regeneration, housing, infrastructure, economic development • Focus on delivery – the how as much as the why…
Engaging Private Landlords in Energy Efficiency
Nigel Turner
Business Development, EDF Energy
Engaging Private Landlords in Energy Efficiency
Research Headlines
Jo Wilson and Faye Wade Future of London
Research aims • Present landscape of London’s changing PRS – tenants, landlords etc • Evaluate successes and shortcomings of national/panLondon policies and tools for improving the sector. • Demonstrate the need for a variety of efforts at borough level to: – engage private landlords in energy agenda and – improve knowledge/data on private landlords in order to improve the quality of their private rented stock.
Project timeline August and September • Desk-based research October • Data gathering, case studies • Research seminars: 2nd October: Marketing energy efficiency to London’s private landlords 23rd October: Tracking London’s ‘invisible’ landlords December
Tenure growth PRS in London grown by 10% since 2001, but not evenly spread across city Trend in household tenure in London, 19612010
Source: GLA
Proportion of private tenants in London, 2011
Issues with housing stock Compound effect: age of property, conservation, high number of flats Period when median home was built
Source: GLA
Conservation areas
Energy efficiency, fuel poverty • PRS has most G-rated properties – ‘quick wins’ • Fuel poverty highest in PRS • Significant reductions in local authority housing Energy efficiency band by tenure, London 2010
Source: GLA
Source: DECC
Proportion of fuel poor households by tenure, 2003 and 2012 (England)
‘Vulnerable’ populations • Reliance on private rented sector for temporary housing • Number of families with dependent children in PRS doubled 2006-10 Number of households in temporary accommodation
Source: Trust for London
Source: Shelter
Percentage of families with dependent children, 1993-2010
Affordability • 26 out of 33 London borough private rents ‘unaffordable’ Median cost of private renting as proportion of median take-home pay by borough
Data sources: VOA (private rents; GLA datastore (income)
Policy drivers • UK carbon targets • 2004 Housing Act – onus on local authorities to improve standards (HHSRS) • Energy Act 2011 deadlines in 2016 and 2018 – local authority as enforcer and mediator
PRS landlords Lack of accessible data. Looking for borough data on numbers of landlords who: • provide temporary housing • attend forums and focus groups • hold HMO licenses • are locally accredited (LLAS data on its way) • Selective licensing(?)
Tools for working with ‘known’ landlords
• Funding and finance frameworks • GLA programme support – RE:NEW • Regulation?
Engaging Private Landlords in Energy Efficiency
Pan-London support for engaging landlords in retrofit Rob Spender
Programme Manager, GLA
The RE:NEW Support Team: Pan-London support for engaging landlords in retrofit 2 October 2014 Rob Spender RE:NEW Programme PRS Manager
Domestic Retrofit Context • The Mayor has set a 60% CO2 reduction target for London by 2025. • 36% of London’s CO2 emissions are from housing, over 80% of this is from space and water heating. • 80% of buildings in use today will still be standing in 2050. Lighting & appliances 15% Cooking 3%
Workplaces 43%
Homes 36%
Transport 21%
CO2 emissions from London, 2008 (excluding aviation) 44.7 million tonnes CO2
Source: Mayor’s Climate Change Mitigation & Energy Strategy, 2010
Space heating 56%
Water heating 26%
Domestic CO2 emissions from London, 2008 15.9 million tonnes CO2
RE:NEW Programme Services • RE:NEW has helped with energy efficiency improvements to over 100,000 homes • Core service • Help landlords to increase scale, speed and value of home retrofit • Expert team – development and delivery
The Diffusion of Innovation
Drivers of innovation • • • • •
Relative advantage Compatibility Simplicity Trialability Observability
Staged Communication
RE:NEW’s Communication Approach
Focusing on the PRS •
Enabling projects – early thoughts on how to make retrofit easier in the PRS
• Business case • Resources and guidance (planning, common technical issues) • The process • Sharing successes – proof it can and does work • Using a common language • Fitting in to your available time • Make sure you have the most up to date information (for example on limited special offers)
Discussion Questions
• Why would landlords invest in retrofit? • Why would tenants invest in retrofit?
For More Information
Rob Spender RE:NEW Programme PRS Manager Greater London Authority 020 7983 5572 robert.spender@london.gov.uk
Engaging Private Landlords in Energy Efficiency
Funding mechanisms for PRS – what works?
Becca Aspinwall Pinsent Masons
Funding Frameworks for PRS Domestic Energy Efficiency Pinsent Masons LLP – 2 October 2014
PRS Drivers • Energy Act 2011 Chapter 2 • 2016 – private landlords will not be able to unreasonably refuse consent to energy efficiency improvements • 2018 – private landlords will not be able to let their properties until energy efficiency improvements have been made (EPC rating E+)
•
Private Rented Sector Energy Efficiency Regulations (Domestic) (England and Wales) • Consultation closed September 2014 • 1 in 10 privately rented homes has the lowest energy efficient ratings and 1 in 5 privately rented homes (double the national average) is in fuel poverty. • Improvements will not require upfront cost by landlords • Exemptions for listed buildings and where finance/consent cannot be obtained
• Draft Fuel Poverty (England) Regulations 2014 • EPC rating C+ by 2030
PRS – Funding Options • Landlords (or their tenants) can access the benefit themselves: • • • •
Green Deal ECO Landlord Energy Savings Allowance RHI
• In collaboration with local authorities: • Green Deal Communities Funding • London Energy Efficiency Fund
Challenges in engaging PRS Landlords • • • • • • •
Language & cultural barriers Lack of information Too complex? Disinterest 2016/2018 still considered far away Lack of cash Funding options unsatisfactory?
Funding Objective Tenant will see immediate benefit although majority will be used to pay back funding
EE paid for through the savings created via:• energy efficiency measures; and/or • On-site renewable heat and/or power
Amount of energy required after improvements
Green Deal Overview • “Pay-as-you-save” • Landlord v tenant – bill payer • Green Deal Communities Fund (works to be carried out by March 2015) • Haringey, Waltham Forest, Camden, Islington, Enfield and Hackney Councils - £6.5m
• Green Deal Home Improvement Fund (£120m 2014/2015 – budget reached in July 2014 - no new applications. Restart in Jan 2015?) • Green Deal Cashback Scheme (can cover up to ⅔ of cost of installation, scheme coming to an end on 30 September 2014) • Green Deal Finance Company
The Future of Green Deal • • • •
3,900 Green Deal Plans to date Over 300,000 Green Deal Assessments DECC aimed to have energy efficiency measures installed in 1 million homes by March 2015 Energy & Climate Change Committee Report Sep 2014 • Costs of Green Deal Finance are not attractive enough • Frequent changes are confusing • Stamp duty discount, variable council tax rates?
Energy Company Obligation Overview To be achi eved by 31 Mar ch 2017 Car bon Emi ssi ons Reduct i on Obl i gat i on ( CERO)
Car bon Savi ngs Communi t y Obl i gat i on ( CSCO)
Reduce CO2 emi ssi ons by 20. 9Mt by i nsul at i ng sol i d and har d- t o- t r eat cavi t y wal l s
Reduce CO2 emi ssi ons by 6. 8Mt by pr ovi di ng car bon savi ng measur es i n ar eas Home Heat i ng Cost Reduct i onof Obl i gat i one. l ow i ncom
( HHCRO)
Reduce t he cost of heat i ng homes by ÂŁ4. 2 bi l l i on f or peopl e i n t he Af f or dabl e War mt h Gr oup
ECO Funding •
Recent changes: • 33% reduction in CERO • Loft insulation, cavity-wall insulation and district heating now allowable under CERO • Extension of ECO until March 2017 with revised targets
•
890,000 measures installed to date: • • • •
36% cavity wall 28% boiler upgrades 21% loft insulation 7% solid wall
•
Often built in to retrofit programmes to attract additional funding / support
•
May be the key to making a retrofit project commercially viable
Landlord Energy Saving Allowance • Reduce tax bill by up to £1,500 per property • Relevant measures: • • • • •
cavity wall and loft insulation solid wall insulation draught-proofing hot water system insulation floor insulation
• Applicable whether you rent the property as an individual or through a business • Expenditure must be before April 2015. What next?
London Energy Efficiency Fund • Loan structure for projects that promote energy efficiency • Funding from European Regional Development Fund and London Green Fund • Funding requirement between £1m and £20m • Can be accessed by individual or groups of private sector landlords, but scale would need to be sufficient
Domestic RHI • Eligible renewable heating system types: • • • • •
• • • •
biomass only boilers and biomass pellet stoves air source heat pumps (popular) ground source heat pumps solar thermal panels (popular) flat plate or evacuated tube only
Available since April 2015 Uptake good – several thousand approved households 7 year support based on per kWh tariff (current range 7.3p to 19.2p) Before applying: • • •
Green Deal Assessment Install loft and cavity wall insulation if a recommended improvement in the EPC Heating system may need to be metered (back up heating, biomass heating not designed to heat whole property, property occupied less than half the year)
Becca Aspinwall, Senior Associate Pinsent Masons LLP 30 Crown Place, London DDI: +44(0)20 7490 6162 M: +44(0)7920 601164 E: becca.aspinwall@pinsentmasons.com
Discussion
How can landlords be incentivised/persuaded to engage with this agenda? Where are the obstacles? What can boroughs do to create a ‘marketable’ offer to landlords? e.g. areabased approaches to funding and delivery, local tools and models. What are the most effective channels for communicating with different types of landlord? e.g. focus groups, meetings, online resources, non-specific channels. What evidence could help persuade/incentivise landlords in energy efficiency? Who is best placed to provide this evidence? eg. national/ panLondon/local government, private sector, professional bodies.
Thank you! Future of London futureoflondon.org.uk @ futureofldn Future of London