New Energy Efficiency Requirement In The UK Rented Sector

The U.K. government has set a target to reduce greenhouse gas emissions by at least 80 percent by 2050, compared to the 1990 baseline. Since energy use in buildings is a major source of U.K. carbon emissions, improving their energy efficiency is central to achieving this target. Data suggests that domestic buildings were responsible for 25 percent and nondomestic buildings for 12 percent of the U.K.’s total carbon emissions in 2009. However, up to now, incentives for making energy-efficiency investments in the rental sector have been lacking. A general absence of a standard mechanism to split costs and benefits between parties has left property owners reluctant to make investments where their tenants are the ones taking full benefit. And the problem has only been exacerbated by high tenant turnover. With this background it is not surprising that voluntary initiatives have had disappointing results and the carrot has now been replaced with the stick.

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