Barriers to Uptake of the Green Deal Understanding the Different Types of Tenure/Ownership

1. ABBE Level 3 Diploma in Domestic Green Deal Advice9. Barriers, Fuel Poverty, Tenures, and Reasons to Act Presented by Barriers to Uptake of the Green Deal Understanding the Different Types of Tenure/Ownership Affordable Warmth/Fuel Poverty Reasons to Act

2. Barriers to uptake of the Green Deal

3. Psychological Barriers Norms Inertia Cost Hassle Beliefs about outcomes Salience Energy literacy Ego ‘Neither sermons nor silence’

4. Psychological Barriers Norms Many people don’t want to be first adopters or ‘guinea pigs’ in taking up new energy schemes and technologies. Inertia People discount the future, preferring a smaller reward today than a larger reward over a longer period of time. So offering small savings on energy bills over a long period is not a sufficient incentive for many. Research has shown that 66% of consumers are not fully confident that their home is as energy efficient as it could be and 47% are unaware how thick their loft insulation is. However 70% don’t plan to improve the energy efficiency of their home in the next 3 years.

5. Psychological Barriers Cost ‘Pay as you save’ pilots experienced drop out due to concerns about entering into long term financial commitments. 20% of people see uncertainty about costs on their energy bill as one of the “less attractive” features of the Green Deal. Hassle Householders face burdensome actions, such as clearing their lofts. Even practical help cannot entirely overcome this which is one of the reasons many ‘pay as you save’ pilot homes dropped out. 31% of people see the hassle and disruption of making improvements as one of the “less attractive” features of the Green Deal.

6. Psychological Barriers Beliefs about outcomes 36% of respondents to a survey had not installed energy efficiency measures due to concern they might be less comfortable in their homes. Salience Energy efficiency improvements are not high on most people’s priority list when thinking about how to spend money, even though it would save them money. 31% of people in one evaluation didn’t take up solid wall insulation, as they simply didn’t know it existed or didn’t see it as relevant to their lives. Making energy saving personally relevant is seen as a “primary challenge” of smart meter roll-out, as people are not aware of their energy consumption day to day.

7. Psychological Barriers Energy literacy Less than 50% of homeowners thought about running costs when making a purchasing decision. Ego People across almost all segmentation groups, particularly higher earners, choose not to install energy efficiency measures due to concern that it will alter the look of their homes.

8. Affordability Research shows that people are unable to act to implement energy efficiency measures because they cannot afford the upfront costs or they are unsure whether they can trust the quality of work. Previous Government schemes have been too ‘top-down’ to take account of what consumers actually want - Not so with Green Deal

9. The Workmanship The customer is also concerned about the work itself. The Green Deal establishes a robust system stretching from the adviser who does a bespoke property assessment, to the measures recommended, to the installer who installs them and the Green Deal plan which establishes the finance repayments alongside appropriate customer service guarantees. Each of these links in the chain is backed up by accreditation to give the customer the peace of mind. In particular, all Green Deal participants will need to carry a Quality Mark so that customers can see they are accredited to the standards of the Green Deal Scheme.

10. Awareness Finally and crucially, many people are simply not aware of the options.They do not know what could be done to their property or what difference energy efficiency could make to their bills. Advertising campaigns have struggled to raise awareness effectively. However, the Green Deal changes the landscape. It enables consumers to choose suppliers which can be held to the standards of the authorisation schemes and to fund work using a new source of finance.

11. Understanding Opportunities Opportunities for improvements include: • Heating system replacement • Property renovation • Re-plastering • Extension • Moving house • Work associated with change of use • Accidental damage (water leak, wind damage)

12. Consequential Improvements What are they? Consequential Improvements are energy efficiency improvements required by Regulation 17D of the Building Regulations 2000 Approved Document – L1B Conservation of Fuel and Power in existing buildings other than dwellings (2006 edition). In short, they are improvement works which are required to be carried out in addition tothe ‘Principal Works’, which means the work necessary to achieve the Client’s purposes in extending the building and/or increasing the installed capacity of any fixed building services.

13. Consequential Improvements

14. Example

15. Understanding the Different Types of Tenure/Ownership

16. Tenures Types of tenure. The power of freeholders, leaseholders, commonholders and tenants to make improvements. The impact of renting. Persuading the landlord to act. The Landlords Energy Saving Allowance. Compensation for improvements.

17. Types of Tenure Tenure describes the legal status under which people have the right to occupy their home. The most common forms of tenure are: Home-ownership: • Leasehold (flats). • Freehold (mainly houses). • Commonhold. • Shared ownership. Renting: • Social rented housing • Private rented housing

18. Statistics on Tenure In 2007 (in England): 14.7million households owned their homes (of whom approximately 2 million are leaseholders). 3.8million households lived in social rented housing. 2.7 million lived in private rented housing.

19. Regional Differences There are regional differences in tenure across England. London and the North East have the highest proportion of households living in social rented housing across all regions (24%). The South East has the lowest level (13%). However, across London less than half of households are now owner-occupied (49.5%). The capital also saw the largest regional fall in owner-occupation levels over the decade 2001-2011 from 56.5% to 49.5%. In Hackney, only one-in-four (26%) of households were owner-occupied. (Changes to housing tenure - evidence from Census 2011)

20. Average Energy Savings by Tenure Source: English Housing Survey, Housing Stock Report 2008, CLG The average SAP for private rented housing has overtaken that for owner occupied housing in recent years.

21. Tenancy A tenancy is a contract between a landlord and a tenant that allows the tenant to live in a property as long as they pay rent and follow the rules. Tenants rights include the right to live in a property in a good state of repair – the landlord should make repairs and maintain the property. However the tenant does not have the right to ask the landlord to make improvements. The landlord could be a Housing Association or a Council (social rented housing) or an individual or company (private rented housing).

22. Individual Tenure Landlord’s Consent If a property that is rented, written permission will be needed from the landlord giving consent to attach a Green Deal charge to the electricity meter. The landlord’s written consent may also be needed prior to installation of the measures. Tenancy agreements should be checked to confirm what consents are required to make changes to the property. In the private rented sector, from April 2016 private residential landlords will be unable to refuse a tenant's reasonable request for consent to energy efficiency improvements where a finance package, such as the Green Deal and/or the Energy Company Obligation (ECO). Additionally it is unlawful to rent out a residential or business premise that from April 2018 does not reach a minimum energy standard (proposed to be set at EPC rating 'E').

23. Housing Act 1988 This is the law which governs the private rented sector. It covers the statutory rights and legal responsibilities for both landlords and tenants. It is not the same as a tenancy agreement which is a legal contract between landlord and tenant stipulating conditions of the tenancy e.g. contract length. The Housing Act stipulates what the conditions can and can’t be in the tenancy agreement. It is important for both landlord and tenant to be familiar with the Housing Act because it stipulates their legal rights, which is extremely important to ensure both parties are treated fairly. As an assessor you don’t need to remember each law, but it is important to remember the Housing Act exists so you can refer to it when needed.

24. The Impact of Renting… Has split incentives between those who pay and those who benefit. The landlord has little incentive to ensure building fabric or installed appliances and equipment are energy efficient, as they do not pay the bills. Occupiers have limited incentive to invest in a building that they do not own (and need the landlord’s consent to do so). Neither is sure of receiving a payback on their investment. Private sector tenants are more likely to be in fuel poverty than those who own their own property or are in social rented housing, although the average energy rating for private renters is now higher than that of owner occupiers.

25. Fuel Poverty by Tenure

26. Persuading a landlord to act The confidence the tenant feels about asking a landlord to make improvements to the energy efficiency of a property will depend on: • How secure they feel about their tenancy. • The length of the tenancy. • The tenant’s relationship with the landlord.

27. Landlord’s Energy Saving Allowance It may help both the tenant and the landlord if they know about the LESA. This is a tax allowance available to landlords who undertake property improvements. Individual landlords are eligible if they pay income tax on their earnings from a let. Landlords with a registered company paying corporation tax on lettings profits can also claim. The allowance is worth up to £1,500 and can be claimed if money has been spent on cavity or solid wall insulation, insulating the floor or hot water system, lagging the roof or draught-proofing the property. The scheme runs to 2015.

28. And If the Landlord Won’t Act? The Health and Housing Safety Rating System (HHSRS) gives the local authority power to act if “Excess Cold” is identified as an issue. A home without a fixed heating system (or only on-peak electric heaters) and no insulation is likely to come into this category. A SAP energy rating of less than 35 is sometimes used as an indicator for this. It is usually Environmental Health departments in local authorities that enforce it. It applies to all tenures but it is generally in the private rented sector where it is used to require landlords to install central heating (or insulation).

29. Summary The most common type of tenure in the UK is freehold. Freeholders have the greatest powers and incentives to make improvements to their property. Those with leasehold have to get the landlord’s consent to make improvements but will gain the benefit. Tenants need the landlord’s consent to make improvements but may experience little benefit due to the length of the tenancy. Landlords have LESA incentive and they are not the ones paying the bills. The local authority can take action to force a landlord to take action if ‘Excess Cold’ has been identified as an issue. Tenants should have greater rights to request the landlord to install energy efficiency measures from 2016 onwards through the Green Deal.

30. Fuel Poverty/Affordable Warmth

31. Fuel Poverty Definition of fuel poverty and affordable warmth: Incidence of fuel poverty. Causes of fuel poverty. The effect of fuel poverty. Indicators of fuel poverty.

32. Fuel Poverty Low Income High Cost (LIHC) indicator, offers an accurate measure of the problem of fuel poverty. Under this definition a household is considered to be fuel poor where: They have required fuel costs that are above average (the national median level) Were they to spend that amount, they would be left with a residual income below the official poverty line

33. Fuel Poverty

34. Affordable Warmth Affordable warmth means a household is able to afford to heat their home to the level required for their comfort and health. The lack of affordable warmth is known as ‘fuel poverty’. Affordable warmth is the solution to fuel poverty.

35. Incidence of Fuel Poverty

36. Fuel Poverty by Region

37. Fuel Poverty – The Concerns

38. Fuel Poverty & Low Income

39. Expensive Fuel There are approximately 4.3 million customers living in rural areas who are not on the gas network. Estimates from 2008 suggest that households off the gas network typically had energy bills in the region of £1,700 per annum, compared to £1,000 for those with gas mains connections. The problem is exacerbated by the fact that domestic heating oil and LPG suppliers often have minimum delivery amounts which necessitate large lump-sum payments. Yet paying for bulk deliveries in advance can be impossible for those on low incomes.

40. Fuel Poverty: Rural Areas

41. Fuel Poverty: Single Person Households

42. Housing Disrepair A home that is inadequately heated is likely to suffer from condensation, dampness and mould growth. It is harder to heat a damp home, meaning more needs to be spent on fuel exacerbating the problem. A household in fuel poverty may not have the means to pay for repairs – or have a landlord who is unwilling to take remedial action.

43. Fuel Poverty: Effect on Health Cold Person: Coughing Allergies Asthma Depression Strokes Heart Attack Respiratory Illness Hypothermia Cold Home: Condensation Mould Mites Damp

44. Temperature and Health Indoor temperatures 18-24C (64-75F): no threat to health Below 16C (61F): reduced resistance to respiratory infection Below 12C (54F): increase in blood pressure and blood viscosity Below 9C (48F): after 2 or more hours, deep body temperature fails

45. Fuel Poverty – Observable Indicators Asthma or wheezing Home too cold/draughty/damp/only partial heating Damp smells Evidence only parts of house in use Housing in poor condition/mould/rot Occupants unhappy – depression, fatigue Occupants wearing lots of clothes indoors Use of supplementary heating Curtains closed in day time

46. Fuel Poverty – Observable Indicators Pre-payment meter Fuel bills seem high Heating in disrepair/dangerous Lack of draught-proofing or improvised (gaps stuffed with rags, paper) Ventilation blocked Damp patches or mould on walls, ceilings, around windows No fixed heating

47. Fuel Poverty Help In Wales: • NEST will be the Fuel Poverty scheme, which will commence from the 2013-14 financial year • Until then EST and Carbon Trust will handle grant arrangements • Wales will have different support mechanisms- which are to be confirmed Scotland: • The Energy Efficiency Package offers help to qualifying private sector households (owner occupiers, private rental tenants) to cover the cost of home insulation and central heating. The EEP is managed by the Energy Saving Trust in Scotland and replaced earlier programmes known as Warm Deal and the Central Heating Programme http://www.energysavingtrust.org.uk/scotland/Take-action/Grants-and-offers/Home-Energy-Scotland/Energy-Assistance-Package

48. Fuel Poverty Help

49. Summary Fuel poverty is a serious issue affecting 4.5m households across the UK 2008). As fuel prices rise, more households are affected by fuel poverty. Fuel poverty can have a serious effect not only the fabric of the building (e.g. damp) but on health and quality of life. It is a complex issue but improving the energy efficiency of the home (through schemes such as Warm Front) can make a major difference.

50. Reasons to Act