Research carried out by consultancy Sustainable Homes has identified a potential £2.4 million savings per year for social landlords through the provision of more energy efficient housing stock.
The research, which involved 25 social landlords managing 500,000 homes, looked at the potential cost savings which could be generated through more energy efficient housing stock, and the increased income energy efficient homes could bring in unexpected areas such as rent arrears and the reduction in the number of properties standing empty.
The study found that:
• There is a correlation between the energy efficiency of the homes and the number of void days. As homes become more energy efficient they are void for a shorter length of time – on average band B properties remained void for 31% less time than those in bands E and F
• Administration costs are considerable for voids. Landlords with more energy efficient stock are spending less on refurbishing void homes, less on repairs and less on staff time to manage voids
• The levels of rent arrears experienced by landlords ranged between 3.5% and 28%, with an average of 14%. There is a correlation between length of time in arrears and energy efficiency of homes
• Colder homes, especially those in band F, have on average two weeks more rent arrears than the rest of the bands each year. The highest performing band A properties spent 30% less time in arrears compared with the worst performing homes
• An analysis of further costs incurred shows that time spent seeking overdue rent payments, legal costs and court costs decline by around 35% for more energy efficient homes.
These findings are sure to brighten the outlook for social landlords, who have recently been hit by a raft of funding cuts and reduced income. The potential positive impact on rent arrears should prove particularly interesting, as analysis by the Nation Housing Federation found that 1 in 10 social landlords have in excess of £1 million in outstanding rents.
According to Sustainable Homes’ research, a home provider with around 10,000 properties could save over £2.4 million simply by upgrading their stock from an average SAP rating of 65 to an average SAP rating of 75 across their portfolio.
Lord Matthew Taylor, the Liberal Democrat peer and former chair of the National Housing Federation, said the study showed the hidden value of energy efficiency and that landlords could indeed invest to save:
“We know that residents really value high quality homes that are affordable to run, and above all comfortable to live in. By investing in better, more energy efficient homes we can have a material impact on lowering fuel bills, reducing rent arrears, addressing voids and improving the bottom line for social landlords – a ‘win-win’ which is good for residents and good for landlords “
Tony Burton, Executive Chair of Sustainable Homes, said the research bolstered the case for social landlords to lead a transformation of the energy efficiency market:
“The price of solar PV has plummeted by 99% since the 1970s and there is no reason why the social housing sector can’t achieve a similar transformation in cutting the costs of energy efficiency. Sustainable Homes’ report further underlines the case for major investment by housing providers, local authorities and Government in better quality homes that are easier to heat, cheaper to run and more comfortable and healthy to live in.”
Want to find out how you could take advantage of the benefits of more energy efficient housing stock? Our energy experts and sustainability consultants would be delighted to discuss your current energy efficiency provisions and how SAP calculations could streamline and energise your existing portfolio.