2017 Housing Perspectives #5: ‘More must be done to tackle fuel poverty’
by Sarah Daly
‘More must be done to tackle fuel poverty’
Sarah Daly, director of strategic sustainability and partnerships, Sustainable Homes, says more must be done to end fuel poverty in the latest of our exclusive articles, compiled as part of the 75th anniversary of the Beveridge Report.
According to National Energy Action, fuel poverty now affects over four million households, up from one million in 2004. More disturbingly, what the government refers to as ‘excess winter deaths’, were estimated at 23,000 in England and Wales in 2015 – around a third attributed to fuel poverty. For such a prosperous nation as Britain these statistics are beyond shocking.
Unfortunately, the incidence of fuel poverty is rising exponentially due to a perfect storm of factors. These include, but are not limited to:
• Rising energy costs: with domestic prices forecast to rise by 5-9% in 2017
• Income factors e.g. stagnating wages and welfare reform
• Poor energy-efficiency, especially in the private rented sector with the poorest households consigned to the most costly and difficult-to-heat properties where they have little means to improve their situation
• Inadequate heating systems: many, especially in private rented sector (PRS), do not have appropriate heating systems and are using expensive, older electrical heating. Tenants can be reluctant to ask their landlord to improve their heating system or insulation for fear of eviction if they complain
• Affordable tariffs: the reluctance of a high number of vulnerable people to ‘switch’ energy supply (due to a lack of knowledge of the cost benefits or urban myths that they might lose service); those on pre-paid meters are often paying up to £100 more per annum for their energy
• Lack of regulation in homes of multiple occupation, especially HMOs with inclusive rent and bills where the landlord controls the heating and will often keep tenants in cold and damp conditions
What should be done?
It’s widely accepted that improving the energy-efficiency of all homes is by far the most important and cost-effective action; not only to make homes more comfortable and affordable to heat, but to ensure we reach our carbon reduction targets of 80% by 2050. Shockingly, we need to be retrofitting one house every minute between now and 2050 to reach this target – something which we are not even close to achieving.
Energy companies still have a requirement to offer energy efficiency measures under the Energy Company Obligation (ECO), but this does not necessarily mean the neediest will get the support they require. The government is promising to target vulnerable households, but the new Obligation (ECO3), which comes into force from April 2017, has a smaller budget.
PRS: getting your house in order
Whilst there has been good progress in combating fuel poverty in the social housing sector, problems persist among homeowners. For example, many ‘just about managing’ homeowners are at risk of falling into fuel poverty, notably older homeowners who are cash-poor. The winter fuel allowance is a blunt instrument to help these people; it fails to meet the needs of some, while the better-off treat it as a Christmas bonus!
However, the biggest challenge is in the PRS. As mentioned, the regulatory environment has been generally lax. This is about to change. From 2018, all new/renewal tenancies will be required to meet higher energy rating standards (at least an ‘E’ rated energy performance certificate). By 2020, it will be unlawful to rent out any property with less than an ‘E’ rating. This will be costly for some landlords , but absolutely necessary. Unfortunately, between now and then we will have another four years of landlords being able to increase their investments at the expense of vulnerable tenants who appear to have little or no rights
Mandatory Landlord Registration (which already exists in Scotland and Wales) is the first step in forcing landlords to improve standards. This can then be accompanied by incentives, such as reducing annual fees based on the energy rating of the property and offering tax breaks.
Landlords with multiple properties are often focused on extending their portfolio rather than meeting the basic needs of those who live in existing homes. It must become the norm for every house to meet minimum standards before landlords can invest in more. One mechanism for this would be for mortgage lenders (either voluntarily on guidance from the Bank of England) or via legislation, to not lend on properties below a minimum EPC level; or to lend with retentions until upgrading work is completed to an appropriate standard. Lenders should see low EPC properties has high-risk, not only because there is more chance of tenants falling into arrears or being evicted, but because incoming legislation will make those properties unlettable after 2020.
Registered properties could be given a simple star rating for clean, safe, warm, healthy and maintained properties. It should also be mandatory for all private accommodation to display full cost of occupancy, including energy costs (this is critical because many people only look at the rent and do not realise they might be paying substantially more in energy for a very poor property).
It is currently too easy for landlords to disguise mould and damp issues by presenting properties with a fresh coat of paint and strategically-placing furniture to hide problem areas. These are often not noticed until the tenant has signed-up and moved in, by which time they may not be able to move for six months or even longer. Higher standards should be enforced with warnings, fines or the removal of a licence to operate for landlords who refuse to maintain their properties to a living standard. Whilst private landlords often complain that they are being ‘targeted’, as with all accreditation schemes, it is only poor performers that will find this system prejudicial. ‘Good’ landlords will see this verification as adding value.
Mind the policy gap
We know that we can reduce fuel poverty by immediately addressing energy-efficiency and upgrading properties. Indeed, tackling poor properties has an immensely beneficial impact on not just tenants, but with job creation and a cash injection into the local economy. And, improvements need to be across all tenures – including HMOs which in England have for too long been excluded from the regulations.
Another point which cannot be overlooked, is the importance of having high quality assessments of buildings and the correct energy-efficiency strategies applied by qualified, independent experts, such as those trained by the Retrofit Academy. There is also a danger that some landlords may do the minimum to stay compliant, as opposed to doing the optimum for that building once, and not having to revisit works within another year or two as legislation increases. A more comprehensive approach will give better outcomes in terms of long-term reduction of fuel poverty and reaching climate targets. However, it is vitally important to have the correct independent expertise upfront, so that properties are considered holistically in terms of heating, insulation and ventilation strategies as it is very easy to cause or exacerbate damp and mould with incorrect interventions.
Follow the 2017 Housing Perspectives series: Housing, poverty and the good society – what can we achieve by 2025?
All the indicators show that a well-coordinated national energy-efficiency programme, with appropriate skilling, reskilling and upskilling of trades, will have an immediate impact on the health, wellbeing and productivity of people across all tenures. ECO3 should be focused on those in dire fuel poverty but we also need to recalibrate expectations in the PRS so that it is not just socially unacceptable, but legally impossible, for rogue landlords to profit from those they keep in sub-human conditions for their own profit.
Landlords who cannot meet minimum standards should simply not be allowed to operate. The worst that can happen is that social landlords, or more professional private landlords, will pick up and refurbish those properties or portfolios that are not being run appropriately.
Sarah Daly is director of strategic sustainability and partnerships at Sustainable Homes.
This article was written for the Webb Memorial Trust and the All-Party Parliamentary Group on Poverty as part of the 75th anniversary of the Beveridge Report and is part of a series of articles we will be running in the coming weeks.