PRASEG discusses the potential for HMOs to have improved energy performance

Author: 30/01/2015

This week, the All-Party Parliamentary Renewable and Sustainable Energy Group (PRASEG) hosted an event on Houses in Multiple Occupation (HMOs) titled ‘A million energy saving opportunities.’ A central concern was that HMOs have typically been left out of energy efficiency policymaking. A core part of the Government’s long-term domestic energy performance improvement – the EPC – is not required in HMOs, meaning relatively little data is collected on energy in these homes.

The event looked ahead to the upcoming minimum standards, which are due to be introduced on private rented properties on the energy escalator from 1 April 2018 onwards. These new standards introduce a requirement to achieve a minimum EPC E rating before HMOs are allowed for rent on the market. However, the Government’s recent consultation on the forthcoming regulations retained the distinction between HMOs let on a room by room basis (which have no EPC and would therefore not be excluded from the market) and all other HMOs, which will be covered by the regulation.

Even for those properties that are covered, there are caveats within the proposed regulations. One of these requires written agreement between residents before any request is made of a landlord – potentially a challenge for groups of tenants where conflict arises or where it’s not easy to make such a request.

There is also a recognition by the consultation that typical residents of HMOs represent an especially vulnerable cross-section of society, including those “who are statutorily homeless… [and] many vulnerable people including families with young children.” Whilst the consultation expresses a desire to do more for these groups, it’s not likely that this round of changes will do much to deliver it. The consultation itself says: “… we are working towards ensuring that such HMOs tenants are not excluded from the benefits of energy efficiency improvements… ” – typically code for ‘in the future; hopefully.’

According to English Housing Survey data, HMOs are the second worst-performing group, just after owner occupiers so, as broader examples of the situation within the private rented sector, and objectively speaking, HMOs would seem clear targets for improvement through regulation. The rate of improvement in properties across this tenure type is also amongst the worst in the industry – a factor which has forced the Government’s hand in introducing the escalator in the first place.

It’s clear that particular groups are disproportionately affected by the challenge of poor quality HMO properties. The National Union of Students has published a report entitled ‘Homes fit for Study’, which looked at properties rented by the student population. It found that 75% of respondents reported having experienced problems with the fundamental living conditions of their property.

Work by Future Climate and the University of Manchester provides findings on ‘energy vulnerability’ in the HMO sector. The research points out that there’s planned growth in the HMO sector as a result of policy direction across departmental areas. The population groups most likely to be affected by this reads as a list of the most vulnerable in society.

The research identified examples of local authorities such as Bath and North East Somerset taking the lead in demanding higher standards within the private rented sector – including HMOs. It suggested recommendations for HMOs, including:

  • Additional licensing schemes where there are high levels of fuel poverty and low levels of energy efficiency.
  • Energy Performance Certificates required as a condition of licensing.
  • Minimum EPC standards set as a condition of HMO licensing.
  • Health and safety enforcement combined with systematic approaches to offers of grants/subsidies and encouraging landlords into voluntary accreditation schemes.

This is the context within which PRASEG debated the state of HMOs and the session, coordinated by Alan Whitehead MP, discussed the early day motion which he’s putting forward. The motion contains the order to have the inclusion of HMOs into the Energy Act legislation debated.

The meeting also heard from officers of Bath and North East Somerset Council who have successfully implemented a HMO licensing scheme, which requires that minimum energy efficiency standards are met. Although this scheme has been introduced, the officers noted that the consultation process, providing an evidence base and the initial implementation of the scheme has required significant resource input. Of the 800 HMOs that have been included in the licensing scheme, 37 are estimated to have an EPC rating of F or G.