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Housing: Energy Performance Certificates

Volume 702: debated on Thursday 5 June 2008

asked Her Majesty’s Government:

What information they are providing to private and social landlords about their obligation to provide an energy performance certificate for rental properties on change of tenancy; and how assessments of energy performance will be made in buildings with communal services.

My Lords, guidance for landlords will be issued imminently and has been discussed in detail with a stakeholder forum. A national print and advertising campaign will commence this month. Energy performance certificates for buildings with communal services will be carried out by an accredited assessor.

My Lords, I thank the Minister for that reply and I declare an interest as a landlord of long standing. What will be the benefit of these new certificates to landlords and tenants and what form will they take? Will they show a percentage of efficiency or will they be like the efficiency labels that come when you buy a fridge or a washing machine? How easy will they be to understand? Will they simply tell you that your windows should be double-glazed?

My Lords, the benefits to landlords and tenants will be warmer properties and lower bills. The properties will be easier to market and tenants will know what they are renting in terms of the costs to run the home. There is a real benefit. The certificate will have an A to G rating to indicate the efficiency of a home. It will also tell you what you should do to improve the rating—for example, install loft insulation. There is a landlord’s energy savings allowance to help landlords who pay income tax to offset some of the costs of improving energy efficiency.

My Lords, are listed buildings at a disadvantage? Will the flat or apartment at the top of a listed building or any large block of flats be disadvantaged because of heat loss through the roof?

My Lords, I am fairly certain that listed buildings will not be made an exception, although I concede that sometimes it is quite difficult to make energy efficiency recommendations for them, simply because, for example, one has to be careful about not putting in plastic window frames and so on. The top floor of communal blocks of flats would be subject to the leasehold or the freehold and there would need to be agreement between tenants on insulation. So there are issues to be addressed.

My Lords, the noble Baroness’s Question refers to buildings with communal services. On a positive note, what pressure can leasehold owners of flats in, for example, mansion blocks put on landlords and property owners to make improvements in energy performance? What incentives will be given to the owners of properties to achieve an improvement in performance, rather than simply having a piece of paper?

My Lords, I think that they will be subject to the same market incentives that I described earlier. The landlord has to face the possibility that, after 1 October this year, the first new tenant will have to have an EPC. There will be a penalty charge if that is not provided. Obviously, trading standards officers will be sensible and there are allowances to ensure that landlords have done everything that they can and have the information that they want. The residents associations in communal flats are always worth their weight in gold in making sure that the managing agent knows what he or she has to do.

My Lords, the noble Baroness will recall that there have been a number of instances where listed building regulations have been in conflict with natural environment regulations, on one occasion stultifying changes until the building actually fell down. Can the Government assure us that there will be a proper relationship between the listed building regulations and the regulations on heat loss and so on, so that the same thing does not happen in this field?

My Lords, there is always a tension between what we want to achieve for listed buildings and in conservation areas and what we want to achieve on carbon efficiency or disabled access, for example. I would prefer to write to the noble Lord to explain how we are going to manage those situations and put a copy of that letter in the Library.

My Lords, the original Question states, “on change of tenancy”. Is that when a new tenant comes in or when a tenant’s agreement has expired and a new one is issued?

My Lords, it is important to be clear about this. An EPC will be needed only when a rented property is marketed to a new tenant after 1 October 2008. The EPC will last for 10 years, so there will be no need to renew the certificate every time there is a change of tenant and no need to do so even if the lease is renewed and there is no change of tenant. I hope that noble Lords are clear about that.

My Lords, the problem with a lot of private tenancies is that tenants who rent at the lowest end will have the highest fuel bills because those private landlords will have done little to make their houses fuel efficient; it is a nasty circular argument. What are the Government doing to make sure that the information from the EPC is passed on to the tenants so that they realise that their bills are higher if the insulation is poor? The present situation, where the EPC is not passed on by estate agents to people buying properties, is a major flaw in the system.

My Lords, the noble Lord raises an important point. We are working with tenants organisations to ensure that information goes out to tenants as well as to landlords. I should add that, at a time of rising prices, which we are all concerned about, we have an efficient and comprehensive fuel poverty scheme—in fact, it is the only one of its kind in the world—under which there is assistance for tenants.

My Lords, what is the total cost to private citizenry, buyers and sellers, of this absurd nanny-state intervention? Does the Minister not appreciate that in the present and prospective state of the housing market it is not particularly clever to impose this additional cost on the buying and selling of homes?

My Lords, the cost of climate change is higher by any standards in comparison with what the noble Lord has said. We estimate that the cost of an energy performance certificate, which of course is market-driven, will be between £40 and £100. I do not think that that is a high cost when the savings that can be achieved are estimated to be about £300 a year. The certificate will pay for itself.