The Government is being urged to take action to prevent taxpayer-funded insulation grants from enriching private landlords by limiting rent increases following energy efficiency upgrades.

The Renters’ Rights Bill has now returned to the House of Lords for Report Stage, with an amendment tabled by Baroness Jenny Jones (main picture) and supported by Generation Rent, which seeks to ensure landlords cannot hike rents after receiving public money to improve the energy efficiency of their property.

Parissa Zand, Research and Policy Manager at Generation Rent, explains that, under the Government’s Warm Homes Plan, the Department for Energy, Security and Net Zero is mandating all private rented homes in England and Wales meet Energy Efficiency Rating C by 2028 for new tenancies and 2030 for existing ones.

It means over 55% of private rental homes in England will need energy efficiency improvements in the next five years.

Non-binding

The Government provides grants for landlords to make energy efficiency improvements when they rent to tenants on low incomes. Under the new Warm Homes Local Grant scheme, landlords are required to sign a declaration that they ‘understand rent should not be increased as a result of upgrades’ funded by the grant. However, Generation Rent argues there is no way to make sure landlords abide by this.

It is concerned that once improvements are completed, landlords could argue the enhanced property specification – better insulation, new heating systems, improved energy ratings – justifies higher rents. This would mean taxpayers fund the improvements while tenants face increased costs that could wipe out their energy bill savings.

Jones’ amendment would make sure that the First Tier Tribunal would see a government grant as an improvement to the home made by the tenant. This would mean it would not be grounds for a rent increase.

The Government’s ambition to lift renters out of fuel poverty is welcome. But landlord groups are already warning they will increase rents as a result.”

Zand says: “The Government’s ambition to lift renters out of fuel poverty is welcome. But landlord groups are already warning they will increase rents as a result.

“The danger is that public money could be used to enrich landlords rather than benefit tenants. We are already seeing cases where landlords have evicted tenants who rely on benefits after publicly funded energy efficiency upgrades, so they could get a better price for their property.”

The most recent Private Landlords Survey found 47% of landlords had at least one property with an Energy Performance Certificate rating of D or below. Of these landlords, only 35% said they were planning to improve the energy efficiency of some or all of their properties.

I’m putting in my amendment because I’m worried that a good policy on energy efficiency will end up annoying the very people it is aiming to help.”

Baroness Jones adds: “I’m putting in my amendment because I’m worried that a good policy on energy efficiency will end up annoying the very people it is aiming to help. The Government are doing the right thing for the climate with higher energy efficiency standards. They are doing the right thing for landlords with grants to help them meet those standards.

“The only people who don’t get a guaranteed better life are the poor tenants who have to put up with the dust, noise and inconvenience of the energy improvements being done, but without knowing if their rent will be going up as their energy bills go down.”