New government plans will make it illegal for private landlords to rent out properties that don't meet minimum efficiency standards.
From April 2018, landlords will be required by law to ensure all their properties meet an energy efficiency rating of at least Band 'E', as part of the government's plans to tackle fuel poverty among low-income and vulnerable households. A higher percentage of these households live in rented accomodation compared to privately owned homes.
According to the Department for Energy & Climate Change (DECC), estimates suggest that, on average, the difference in a heating bill from the least energy efficient properties to those with a Band E energy rating is £880. DECC claims the plans will ensure up to one million tenants have warmer homes that cost less to heat.
Government said fuel-poor households living in the least efficient privately-rented homes already need to spend on average around £1,000 more to keep warm compared to the average home.
Secretary of State for Energy & Climate Change Ed Davey said: "These new laws will plug the gaps in draughty homes – helping households to keep warm and drive down bills. Many of the poorest tenants will benefit and, with government support, landlords can improve their properties at no upfront cost.
"It's good news all round and yet another way we're taking action to ensure that cold homes with bloated energy bills become a thing of the past."
Parliamentary Under Secretary of State Amber Rudd added: "It's also good news for landlords, who can benefit from improved properties with the financial support of the Green Deal and other schemes, and a real boost to the industry."
Financial support for energy efficiency improvements is available through the Green Deal and Energy Company Obligation, which together have improved over one million homes in less than two years. This means landlords don't necessarily have to foot the bill for installing new boilers and insulation measures to improve the energy efficiency of their properties – and landlords will only have to make improvements that are cost effective.
From April 2016, tenants will have the right to request consent for improvements to make their homes more comfortable, and easier and cheaper to keep warm, and the landlord cannot unreasonably refuse.
The government is also drawing up plans for a £25 million fund to support the installation of first-time central heating systems in off-grid households. This is on top of an investment of over half a billion pounds over three years to get Britain's homes warmer and leaking less energy.
The government will also be announcing its Fuel Poverty Strategy soon.
The news was described as possibly "the single most significant piece of legislation to affect our existing building stock in a generation", by John Alker, acting CEO of the UK Green Building Council. "Government deserves huge credit for sticking to its guns," he added. "Some will undoubtedly cry 'red tape', but good landlords and forward-thinking property companies have nothing to fear. This could provide the impetus needed to upgrade our worst-performing, most energy-hungry rented properties and help to kick-start a multi-million pound market in energy efficiency products and services in the UK."