www.communities.gov.uk

Tenants home in on bills

Published 1 October 2008

New research shows that 79 per cent of renters are worried about the cost of their household bills.

This is at a time when bills are a hefty slice of UK households' expense budget, with the average UK household currently paying the equivalent of 20 per cent of the average rent (£67601) on their gas and electricity bills (£13602).

With the number of new tenancies mounting - by 20 per cent in the past three months3 - and with fuel bills continuing to rise, landlords will want to appeal to the growing supply of tenants and respond to their concerns over fuel bills:

  • after location, household bills are now the most important factor in choosing a property to rent - 22 per cent saying that the level of household bills had an 'extreme effect' in their decision-making
  • whilst noisy neighbours, permission to paint on the walls and aspect of houses feature highly in rental decisions, it is financial concerns which top the chart of questions to ask landlords - over a third (35 per cent) of renters rank council tax in their top three factors to ask landlords, and 34 per cent rank household bills in their top three factors
  • over a quarter (27 per cent) of renters regretted that they hadn't found out about the level of household bills beforehand, and wished they'd asked their landlord when looking for the property

Despite renters losing sleep over bills and the ability to save £300 a year through energy efficiency measures, 77 per cent of renters believe that their landlords don't care about energy efficiency. Landlords may not be banking on the potential to reduce household bills, and attracting tenants wanting more cash in their pockets. What's more, help is at hand for landlords, offsetting the cost of installing energy savings measures against income tax4.

This comes at a time when Energy Performance Certificates are being introduced to the rental market. From 1 October 2008, an EPC will be required for all new tenancies signed on or after this date. Valid for 10 years, the EPC will provide landlords and tenants with information on the energy efficiency and carbon emissions of their property in an easy-to-understand fridge-style rating of A-G. As part of the evaluation, the assessor will also provide a list of recommendations suggesting cost effective improvements to raise the property's energy efficiency.

Since being introduced in 2007 for homebuyers, more than one million Energy Performance Certificates (EPCs) have been produced and registered in England and Wales - with the average rating being 'D'.

Communities Minister Iain Wright said:

"Energy Performance Certificates offer tenants and landlords a real opportunity. The certificate provides clear information on a building's energy efficiency and recommends cost effective improvements. The EPC should be welcomed by tenants who are looking for better value and more energy efficient rental properties, as well as landlords who are, more than ever, keen to attract responsible and committed tenants."

David Salusbury, Chairman, NLA:

"Rising energy prices and leaner economic times mean tenants want to live in properties which are fuel efficient and don't waste money. Now, landlords in England and Wales will have to provide this critical information up front, enabling tenants to make more informed decisions about where they choose to rent. Landlords who own properties without proper insulation or older, inefficient boilers could find tenants are looking for energy efficiency and ever-cheaper fuel bills."

Ian Potter, Head of Operations, Association of Residential Letting Agents:

"Landlords should get their EPCs sorted out as quickly as possible so that they are ahead of the game when it comes to re-letting a property. Every landlord hates void periods and needs to be in the position to react quickly when an existing tenancy ends. Equally, tenants may be interested in energy efficiency - some for green motivations, but more as indication of their fuel bills. A happy tenant is a longstanding one."

On 17 September, a new national newspaper and radio advertising campaign began targeting in particular landlords and tenants of all properties. The aim is to raise awareness of the obligations across all sectors to get an EPC, as well as the right to see one. It forms a key part of the cross Government campaign to Act on CO2. In addition, new guidance and leaflets for tenants and landlords have also been published and are available on the Communities website.

This is part of the wider roll out of the Energy Performance of Buildings Directive with commercial EPCs and Display Energy Certificates (DECs) for public buildings also coming into force today.

Notes to editors

For more information, please contact:

1. Polling - YouGov

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1984 adults. Fieldwork was undertaken between 22 - 24 September 2008. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

2. Additional Polling Findings

Top Decision-Making Factors for Renters

  • Location
  • Bills
  • Local transport
  • Local amenities
  • Size
  • Décor

Most Important Questions for Renters to ask Prospective Landlords ( per cent denotes the number of renters that featured this factor in their top 3 questions for landlords)

  • Council tax - 35 per cent
  • Household bills - 34 per cent
  • Gas certificates and fire alarm/smoke alarm - 24 per cent
  • Permission to repaint or put things on the walls - 23 per cent
  • How the appliances work - 17 per cent
  • Whether the neighbours were friendly - 15 per cent
  • Rubbish collection - 11 per cent
  • Whether there is cable TV and/or wireless broadband - 10 per cent
  • Age of the boiler - 9 per cent
  • Whether the property is light and sunny and where the sun rises - 5 per cent
  • The location of the nearest pub - 3 per cent
  • Whether the curtains and carpet can be cleaned - 2 per cent

Renters' response on whether it would have been better or worse 'financially' if they had found out more about the cost of running (eg cost of gas/electricity bills) your rented property before they committed to renting

  • Would have been better - 27 per cent
  • Would have been neither better or worse - 73 per cent
  • Would have been worse - 0 per cent

3. More information on EPCs and other EPBD measures.

October marks the completion of the introduction of EPCs. The full timetable is below:

Homes:

  • Since 1 August 2007 all homes going on the market with 4+ bedrooms have required an EPC when sold
  • Since 10 September 2007 all homes going on the market with 3+ bedrooms have required an EPC when sold
  • Since 14 December 2007 all homes going on the market with one or more bedrooms have required an EPC when sold
  • Since 6 April 2008 all new-built homes have required an EPC
  • From 1 October all remaining homes for sale (including those which had been on the market from before the above dates) will require an EPC and all homes for rent will require an EPC when newly rented.

Commercial:

  • Commercial buildings also require an EPC when built, sold or rented. Since 6 April 2008 this has applied to buildings over 10,000m2; since 1 July 2008 to buildings over 2,500m2.
  • From 1 October they will apply to all remaining commercial buildings.
  • More information on Energy Performance Certificates and the other measures being introduced to improve energy efficiency of buildings is available on Communities website - www.communities.gsi.gov.uk/epbd.

End notes

1. Housing in England, 2006/7 (18 September 2008).
2. Energy Saving Trust, based on average UK bill data from August 2008 (£900 for gas and £460 for electricity).
3. ARLA, 8 September 2008.
4. Landlord Energy Savings Allowance.

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