The Scottish Government research confirms what we have thought for a while – the least energy efficient properties are those in rural areas. They are off the gas grid, pre-1919 so are of traditional build such as stone and slate, and are detached so more exposed to the marvellous Scottish weather.
So we know where the problem lies and there is unanimous support to make homes cheaper to heat and more comfortable. However, after four years working towards a solution with the Scottish Government, we were disappointed with the detail of the proposals in the recent consultation on introducing a minimum energy efficiency standard to the private rented sector.
The proposed interventions are based on averages, resulting in a thin spreading of investment across a wider performance range of properties over a short period of time, which will ultimately leave rural properties continuing to lag well behind those in urban areas.
To take average costs and the average length that people stay in let properties fails to target the poorest stock sufficiently. Rural tenants tend to stay in their properties for an approximate average of 8 years compared to the mere 18 months of urban tenants. Therefore, for work to be completed at tenant changeover, causing least disruption to both landlord and tenant, a decent amount of time is needed.
Average cost to improve the typical rural property is illustrated in the Scottish Government’s research below. However, the maximum spend by the landlord is proposed to be only £5,000.
On one hand this is a huge amount of money which is not linked to the potential rental income but on the other hand it doesn’t even touch the sides of the amount of work that is required to make a genuine difference to occupants. It is unknown what funding or other incentives may be available to support the landlord’s contribution.
There is hope that these will fill the void but this is perhaps overly optimistic given the Scottish Government’s current reluctance to offer grants.
If there is to be a minimum energy efficiency standard the first step, whatever the detail of the proposed policy intervention, must be to improve the methodology on which energy performance is measured.
The current system fails to reflect reality and does not allow an owner or occupant to understand their energy rating or how it can be best improved. It is essential this basis on which to build policy and apply funding is stable and transparent.
The intervention then must be targeted both financially and by regulation and other specific issues for these older properties have to be considered. For example it is vital that ventilation measures come hand-in-hand with insulation. Anyone who has failed to consider air movement in a stone property will be all too aware of the risk of damaged houses and ill tenants suffering from poor air quality and condensation problems.
Policies must work together. We need more rural homes particularly let at affordable rents yet combining the new tenancy provision with proposals such as those set out in the energy efficiency consultation could lead to exactly the opposite.
There needs to be incentives and encouragement for landlords delivering housing particularly in the most rural areas where they are the primary source of affordable properties. If it’s all stick and no carrot there is a danger that landlords will be forced to invest heavily in energy efficiency works but in turn will have to increase rents to pay for it – resulting in tenants being in the same position but paying more for rent and less on heating bills. Others may decide the risks outweigh the benefits and move out of the long term letting sector altogether.
Scottish Land & Estates looks forward to continuing our work with the Scottish Government to ensure energy efficiency regulations are developed with reality and potential consequences at the forefront of thinking so our members can improve the energy efficiency of their rural properties and continue to let homes at affordable rents.