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Baker Homes Blog

PRESS RELEASE : New research links energy efficient homes to savings for landlords

Posted by John Stapleton on 29/06/16 07:30

  • Potential for £2.4 million savings per year for social landlords identified
  • Costs from rent arrears and voids saved by efficient stock highlighted by new study involving 25 social landlords managing 500,000 homes

New research unveiled this week has sharpened the case for better, more energy efficient homes as under-pressure social landlords seek to cope with a raft of funding cuts and reduced income. The study, by campaigning consultancy Baker Homes, looked at the potential for more energy efficient homes to provide cost savings and increased income in unexpected areas like rent arrears and reduced voids, where properties lie empty.  Rent arrears are a big problem for the social housing sector; an analysis by the National Housing Federation found that 1 in 10 social landlords have more than £1million in rents outstanding.

The study found that:

  • There is a correlation between the energy efficiency of homes and the number of void days. As homes become more energy efficient they are void for a shorter length of time - on average, 31% shorter for band B[1] properties compared to those in bands E and F

  • Landlords with more energy efficient stock spend less on refurbishing void homes, less on repairs and less on staff time to manage voids

  • The highest performing band A properties spent 30% less time in arrears compared with the worst performing homes. Colder homes, especially those in band F, have on average two weeks more rent arrears than more energy efficient bands each year.

  • Other cost savings identified include time spent seeking overdue rent payment, legal costs and court costs which decline by around 35% for more energy efficient homes

The boost to landlords’ bottom lines from more energy efficient homes could be significant – with potential for a 10,000 home provider to save over £2.4 million if they upgraded their stock from an average SAP 65 to SAP 75.

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 Baker 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. Baker 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.”





[1] On a range from A to F where A is a very energy efficient home and F is a very inefficient home.

Topics: Social housing, Fuel poverty, Energy efficiency, Finance, research

New research examines the link between rent arrears, voids, energy efficiency measures and cost savings for landlords. Download the report.


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