Minimum standards, maximum benefits

Today the UK Green Building Council and WWF have published a report they jointly commissioned from us here at Parity Projects, investigating the costs and benefits of the forthcoming minimum standards for privately rented homes. Amidst concerns from some that the regulations would place an undue burden on landlords, the analysis shows that in fact the average cost of bringing F- & G-rated properties up to the expected minimum standard (an EPC rating of E) is a modest £1,421. But the low cost is just part of the story. Private rented homes account for significant proportion of the UK’s fuel poor households, and the report demonstrates that, on average, the improvements required will save occupants more than £400 per year on their energy bills. That’s a “pay-back” of less than four years.

While those savings would usually be made by the tenant, there are significant benefits for landlords too. DECC’s own research suggests that E- and F-rated dwellings sell for approximately 6% more than their poorer-performing (G-rated) counterparts. For the average UK house, this means an uplift of £15,000 – a ten-fold return on the average initial investment. Of course landlords of the poorest households are also likely to see a reduced risk of rent arrears as costly fuel bills diminish following these improvements.

With such short pay-backs on the measures identified, it is possible that many of these will meet the “golden rule” and qualify for Green Deal finance, meaning that there could actually be zero up-front costs to the property owner. In many cases, it will also be possible to subsidise the works with an ECO grant or Green Deal cash-back, or to offset the costs against tax through the Landlords Energy Saving Allowance scheme.

Given the potential for these regulations to play a role in re-invigorating the retrofit market after the last year’s trials and tribulations, creating jobs and growth along the way, it seems they could represent a pretty good deal for everyone concerned: tenants, landlords, the Government and UK-plc. We look forward seeing the long-awaited consultation on the detail of the policy, and to doing more of what we do best – helping landlords to understand how to meet the requirements as cost-effectively as possible.

If you’re a private landlord and would like help identifying the most cost-effective way of bringing properties in your portfolio up to the 2018 standard, please contact us, or vist our “Services for Private Landlords” page.

The full UK-GBC/WWF report is available here: Minimum EPC standards report WWF&UK-GBC v1pt4

4 thoughts on “Minimum standards, maximum benefits

  1. Richard Griffiths

    Thanks Pete. We’re pretty pleased with it: it provides a pretty compelling case for action, including for the landlords themselves.

    Reply
  2. Frances Voelcker

    I have just had a quick look at this report. Very good at last to see this huge problem being tackled, and a positive message coming out. There is a lot to take in and probably some useful data there for policy level.

    But I have some queries about the detail, and where it is there in some case, the assumptions are worrying. For examples:

    1) In spreadsheet of costs EWI on 2,135 solid walled houses is given in row 131 as costing an average of £5,393 and in row 144, on the same number of houses, as costing £6,472. Are these alternative types of EWI? If so, I could not find what these alternatives were, even in the main report.

    2) Average cost of EWI was given as £90.00 per m2. This may be av cost of m2 WITHOUT the measures to avoid leaving cold-bridges, such as carrying EWI down into ground, which may entail moving foul and rainwater drainage connections; extending verges, eaves, cills and thresholds; coping with insulating the lowest part of the wall above an abutment, repositioning of incoming service connections etc. These can double the av cost per m2. (If not detailed to this standard, we are building in defects)

    3) solid floor insulation method assumes 50mm of insulation will be laid on top of floor. Door heights, stairs, plumbing and kitchen fittings re window cill height, all make this measure impractical in many cases.

    I have not looked yet at the assumptions behind internal insulation of walls but the risks of interstitial condensation and cold bridging and flanking are greater even than with external insulation.

    2. It would be useful to see the measures listed in sequence of value-for-money IF the planner-friendly filter is not applied. It may be unacceptable to alter the external appearance of some buildings (Listed, and Conservation Area) but we should at least know what energy-savings we are ruling out thereby, and what discomfort and fuel cost we are imposing thereby on residents in those buildings.

    Reply
    1. Richard Griffiths

      Hi Frances.

      Thanks for the comments. A few clarifications from our technical team:

      Row 131 on the spreadsheet is internal solid wall insulation, row 144 is external solid wall insulation.

      Re: EWI costs, Wwe have not excluded costs of the measures you mention to avoid cold bridging. £90 per m2 matches recent pricing information we have received from clients, although we have noticed that a number of private clients are receiving quotes in excess of £160 per m2 recently. This appears to be opportunism by installers linked to the poor level of client knowledge of product and the recent generous incentives from government (allowing installers to hike their prices). Large landlords appear to have access to pricing in the range £75-£78 per m2. Good up to date information on pricing is hard to find.

      Re: floor insultation, we believe it to be difficult rather than impractical, but the point is well made. Our report is necessarily high level and measures are subject to survey etc. Note that we calculate that floor insulation has poor cost-effect (around £1000 per SAP point improvement) and results in a relatively small improvement per house, so if measures are applied in order of cost-effect other and more practical measures will often be installed first.

      Re: condensation, this a matter of ongoing debate outside the scope of our report. We have sidestepped the debate by applying EWI only in the analysis described in section 5.1. This may not have been made fully clear in the report, if so we will amend.

      Finally, the measures list is available as a spreadsheet. You may apply filters as you wish!

      I hope that helps.

      Reply

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