Green Deal ‘Rejected by PRS’

GREEN DEAL ‘REJECTED BY PRS’

30 March 2017

Both landlords and tenants of private rented properties were generally unhappy with the Green Deal Pay As You Save model of energy efficiency improvements, according to a report from the Department for Business, Energy & Industrial Strategy.

The report, based on research by polling firm Ipsos MORI, is an evaluation of a £2m project run in four local authority areas to target and incentivise uptake of energy efficiency installations in the private rented sector by subsidising installation of improvement measures.

The PRS is the second largest housing sector in the country, accounting for 4.3 million homes, but is the worst performing in energy efficiency terms, and the project, run in Haringey, Cambridgeshire, Suffolk and Bristol was intended to see how that could be improved.

However the local authorities found that only 33% of the PRS homes which had Green Deal Advice Reports went on to have installations, compared to 57% of non PRS homes in other council areas, though the receivership of installers for three out of the four local authorities made the calculations potentially unreliable.

The researchers, who interviewed local authority staff, landlords and installers, found that landlords could be hard to reach, and that they could often get improvements carried out more quickly and cheaply through their own existing network of installers rather than through subsidised installations.

Nevertheless they found that landlords who took part in the scheme reported being motivated by

securing their financial investment in the property, maintaining happy tenants and attracting future tenants.

But Pay As You Save funding was not popular with many landlords because of the complicated setup of the funding model and the perceived unfairness of making tenants pay for property improvements, and availability of existing funds made PAYS funding unattractive.

Though no tenants were interviewed, they were said to be difficult to engage with and were not actively requesting improvements.

The research showed that even with a subsidy, tenants in general were unwilling or unable to sign up to the scheme without their landlord’s permission, or were not sufficiently engaged with the issue of energy efficiency to take an interest.

The landlord-tenant relationship was seen by local authorities to act as a barrier to energy efficiency improvements, and further research was said to be needed in order to understand “how to unlock this relationship.”

The report also suggested that the specific location could play a part, since “areas with student

populations were constrained by fixed periods when installations could happen, whereas high competition in areas like London meant landlords were not motivated to improve properties, and local authorities stated that tenants were not confident to make additional requests.”

The project was run alongside the £85m Green Deal Communities project which funded improvements in social housing with the participation of 98 local authorities in 2014-15.  Research was carried out between July 2015 and February 2016.

BEIS has not given any reasons for the long delay in publication of the report, but its appearance now may not be welcomed by the new management of the Green Deal Finance Company, which is seeking to breathe new life into the scheme, and may have PRS as a potential target area.

To see the full report and the detailed research on which it was based go to https://www.gov.uk/government/publications/evaluation-of-the-green-deal-communities-private-rented-sector-funding