Labour must consult with landlords if it is to resurrect minimum EPC rules

     Andrew Ferguson - Managing Director of Buy-to-Let Mortgages 

When the Conservative Party scrapped its plans to hike energy efficiency standards in the private rented market last September it was always likely the bill would resurface at some point. 

However, I imagine many people didn't expect to see the plans to be resurrected so soon by the incoming Labour government. 

Whilst it went largely unreported in the media, Labour has signalled its intention to revive the Tories' abandoned plan to make the private rented property stock more energy efficient.

Buried on page 56, the Labour manifesto reads: "We will ensure homes in the private rented sector meet minimum energy efficiency standards by 2030, saving renters hundreds of pounds per year."

That's about as much detail as we have for now, but that suggests that Labour will look to introduce new legislation in the near future. 

If that is the case, this time the government should take the time to properly engage with the industry on how to make this policy workable. 

While most people agree that retrofitting old housing stock is the right and sensible thing to do, there were some obvious weak points in the previous bill. 

Firstly, Labour must find a better system for measuring energy efficiency than Energy Performance Certificates (EPC).

The trouble with EPCs is that they don't actually measure efficiency at all - they measure the cost-effectiveness of running a home. That's no good if the Government's intention is to reduce emissions.

On top of that, EPCs are also based on outdated assumptions and unfairly punish owners of older properties. 

Secondly, the new government needs to offer a genuine incentive to make landlords want to upgrade their properties. 

The past Government preferred all sticks over carrots, leaving landlords to shoulder the entire cost of upgrading their homes, which could cost tens of thousands of pounds. 

While the Conservatives did launch the Green Homes Grant, offering a government contribution of up to £10,000 for home upgrades, the scheme was scrapped after six months. Similarly, its Boiler Upgrade Scheme, designed to nudge homeowners to switch to heat pumps, was only big enough to help 90,000 households.

Finally, Labour must make its plans clear and unambiguous early. The Tories' EPC bill was introduced in 2021 and was still stuck at the second reading stage - stage two of 11 in the legislative process - when it was ditched a little under a year ago. 

That created huge uncertainty and, without a doubt, led to some landlords selling up and exiting the market. 

Credit must go to Labour for setting out its thinking on timescales up front, but it must also reveal the details of its plans - and legislate on those plans - in a timely fashion.

The private rental sector is hugely important to the wider housing market, so I would like to see the new administration engage with it on the big issues.