Independent think tank E3G published a briefing on 13 January 2023 finding that stricter minimum energy efficiency standards for rented homes could save tenants £570 per year in the UK, and £1.75bn per year across the economy1. The briefing, Cutting Energy Bills and Raising Standards for Private Renters, is endorsed by National Energy Action, the Green Finance Institute and Generation Rent1.
Under current rules, homes can only be rented out if they meet a minimum energy performance certificate (EPC) rating of E1. In 2020 the government consulted on raising that minimum to EPC C from 2025 for new tenancies and 2028 for existing tenancies, but the proposals have not been put into law1. E3G says the savings are achievable if the government legislates those proposals through the Energy Bill then before Parliament1. The £570 figure is based on E3G modelling using the 2018-19 English Housing Survey and Ofgem typical consumption values1.
E3G reports that over one in four renters live in fuel poverty, more than in any other housing type, and that two-thirds of privately rented homes do not meet the government's target energy efficiency level1. Almost a million rented properties would not meet the legal definition of a "decent home"1. Tenants pay the energy bills but only landlords decide whether to invest in measures such as insulation, draught-proofing and new heating systems1.
"The poor state of many rented homes is a growing national scandal. Tenants are facing sky-high bills in part because so much energy is wasted in inefficient homes. The government has an oven-ready set of regulations to fix this, now they need to put them into law."
The briefing sets out the proposed standards as follows:
| Tenancy type | Proposed minimum EPC | Proposed date |
|---|---|---|
| New tenancies | C | 2025 |
| Existing tenancies | C | 2028 |
Why it matters for households
For a private renter, the EPC rating of the home sets the floor on running costs that the tenant cannot change directly. Insulation, glazing and heating systems are the landlord's decision, so a low rating means the household pays for the energy that the fabric of the building loses. E3G's £570 annual figure is an average across the stock it modelled, not a sum any individual household is guaranteed1. The briefing frames the standards as a route to lower bills, lower emissions and progress against legally binding fuel poverty and net zero targets1. For a home's energy independence, the practical effect of a higher minimum standard is that the building itself needs less bought energy to stay warm, which reduces exposure to price movements the household does not control.
What happens next
E3G and the supporting organisations are urging the government to raise the minimum standards through the Energy Bill then in Parliament1. No date has been reported for a government decision on legislating the 2020 proposals. The minimum energy efficiency standards for rented homes remain at EPC E until any change is made law. Scotland has its own energy efficiency standards for privately rented homes, and the size and energy performance of the private rented sector set the context for the savings E3G estimates.