• Landlords up their game on energy, but one in twenty rentals still pose hazard

    October 4th 2017. Posted in Business Insurance

    According to a new study by AXA1, the private rental sector has seen a rapid improvement in energy efficiency over the past two years. The number of worst-rated properties has halved, and rentals come out better on boiler upgrades, insulation and smart meters than owner-occupied homes. Despite this, one in twenty rentals still breach minimum standards set to come into force next April. These pockets of inefficiency mean that tenants are over-paying on energy by an estimated £13 million every month.

    Energy is certainly top of mind for UK tenants, as cold and damp were named the biggest bugbears by 43 per cent of those surveyed. A quarter said they felt they were paying excess bills due to the energy inefficiency of their homes.

    The study found that one in twenty rental properties pose an ‘excess cold hazard’ to residents as they fall into the worst-rated Bands F and G. This means that more than 200,000 homes are now at risk of being banned from the private rental market next April when minimum standards come into force.

    Just how much these failing homes are costing tenants was revealed by analysis of their monthly bills. The average monthly bill in a Band A rental is £61 per month, increasing to £76 in Band E, and then £112 in Bands F to G. This means that UK tenants are still paying for energy failings to the tune of an estimated £13 million every month.

    The good news is that the number of failing properties is declining fast: the study found that the number of F and G banded rentals has halved since 2015, when official estimates put them at one in ten. More than half of tenants surveyed by AXA said their current rentals are in bands A to C.

    The private rental sector also compares well when it comes to energy upgrades. Tenants in England and Wales are now more likely to have smart meters installed than people who own their own homes, and there are fewer inefficient (pre-2005) boilers in rentals too.

     

    Energy features in tenanted properties compared to owner-occupied (England and Wales)

     

     

    RENTAL HOMES

     

    ALL HOMES  

    Double-glazing

     

    73 per cent

    75 per cent2

    Roof insulation

     

    57 per cent

    35 per cent2

    Smart meters

     

    14 per cent

    12 per cent1

    Post-2005 boiler

     

    69 per cent

    59 per cent2

    Solar panels

    1 per cent

    6 per cent3

     

    Wood-burning stove

     

    6 per cent

    7.5 per cent4

    The picture looks even better north of the border, where Scottish tenants report the highest energy efficiency in the UK. Eighty three per cent of rentals have double glazing, 76 per cent – roof insulation, 73 per cent –modern boilers, and 15 per cent have wood-burning stoves (double the average elsewhere in the UK).

    AXA advises landlords running properties in the worst-rated bands to consider upgrading their properties as a matter of urgency. While those in Bands F and G will be forced from the market next year, those in Band E may well join them over the coming years following last week’s recommendations to Government by Frontier Economics.  Help is on offer to landlords under schemes like the Green Deal, while tenants on low incomes can access support from the Affordable Warmth Obligation.

    “Our study has found that landlords are making significant investments into improving the energy efficiency of their properties. And this is part of a bigger trend: when we look at our surveys of tenants and landlords over the past five years, we see progress across the board – on security, maintenance and numbers with proper tenancy agreements in place. Many landlords we speak to are ‘accidentals’, who typically own one or two properties. They are, by and large, professionalising and investing more seriously in their tenants’ comfort and the future health of their rental properties. Pockets of failure exist in this market, but it is not the story for the 95 per cent of landlords who are trying to do the right thing.”  Gareth Howell, Managing Director, AXA Direct

    Media Contacts 
    Notes for Editors 

    1 A survey of 1,000 UK tenants conducted in August 2017.

    2 Smart Meters, Quarterly Report to End March 2017 Great Britain, Department for Business, Energy & Industrial Strategy, 25 May 2017.

    3 English Housing Survey, Headline Report, 2015-2016.

    4 Study by Ovo Energy, May 2017.

    5 Domestic Wood Use Survey, Department for Business, Energy & Industrial Strategy, 31 March 2016

    Legal Notes 

    About AXA

    The AXA Group is a worldwide leader in insurance and asset management, with 166,000 employees serving 107 million clients in 64 countries. In 2016, IFRS revenues amounted to Euro 100.2 billion and IFRS underlying earnings to Euro 5.7 billion. AXA had Euro 1,429 billion in assets under management as of December 31, 2016. In 2016 Interbrand ranked AXA the 1st insurance brand worldwide for the 8th consecutive year.

    In the UK AXA operates through a number of business units including: AXA Insurance, AXA PPP healthcare and AXA Ireland. AXA employs over 10,000 staff in the UK.

    The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR 0000120628 – Bloomberg: CS FP – Reuters: AXAF.PA). AXA’s American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.

    The AXA Group is included in the main international SRI indexes, such as Dow Jones Sustainability Index (DJSI) and FTSE4GOOD.

    It is a founding member of the UN Environment Programme’s Finance Initiative (UNEP FI) Principles for Sustainable Insurance and a signatory of the UN Principles for Responsible Investment.