‘Improving the energy performance of privately rented homes in England and
Wales’
A response by the Federation of Master Builders
December 2020
About the Federation of Master Builders
The Federation of Master Builders (FMB) is the largest trade association in the UK
construction industry representing thousands of firms in England, Scotland, Wales and
Northern Ireland. Established in 1941 to protect the interests of small and medium-sized
(SME) construction firms, the FMB is independent and non-profit making, lobbying for its
members at both the national and local level. The FMB is a source of knowledge,
professional advice and support for its members, providing a range of modern and relevant
business building services to help them succeed. The FMB is committed to raising quality in
the construction industry and offers a free service to consumers called ‘Find a Builder’.
Consultation response
Question 1: We would welcome views on possible impacts of the policy on the size of the
PRS sector, the effect this could have on vulnerable households, and suggestions to
mitigate this effect where it does occur, including any evidence.
N/A
Question 2: Do you foresee any impacts for protected groups? Please provide evidence to
support your answer.
N/A
Question 3: We would welcome views on any possible long-term impacts of COVID-19 that
could impact on making the required energy efficiency improvements from April 2025 and
suggestions to mitigate this effect where it does occur, including any evidence.
N/A
Chapter 1
Question 4: Do you agree with the government’s preferred new target of EER C as a
minimum energy performance standard in the PRS?
The FMB supports the proposal for as many properties as possible in the privately rented
sector to increase their energy efficiency rating to C.
Question 5: We would welcome your views on the pros and cons of these alternative
metrics, in relation to our overall policy goals around reducing carbon emissions, fuel
poverty, and energy bills; please provide evidence with your answer.
The FMB supports the use of metrics that track progress made on tackling fuel poverty. This
is because measuring the impact of energy efficiency upgrades on a household and their
day-to-day life, such as making tangible savings on fuel bills, is an important means of
raising awareness of retrofit and its benefits among the public.
The FMB asked its members in November 2020 to identify the biggest barrier to scaling up
retrofit in the UK. 1 in 5 (17%) cited a lack of consumer awareness of the benefits of a more
1
energy efficient home. Utilising metrics which demonstrate fuel bill savings is therefore
helpful in driving up this awareness.
The FMB also supports the need for metrics that reward households taking up electric or low
carbon energy sources, moving away from gas boilers. That the Primary Energy Rating
considers gas boilers more efficient than electric energy sources represents a perverse
incentive, and should not be incorporated into the PRS regulations.
Question 6: Do you agree with the government’s preferred policy scenario of requiring ‘new
tenancies’ to reach EER C from 1 April 2025 and ‘all tenancies’ to reach EER C by 1 April
2028? If not, do you have alternative suggestions; please provide evidence with your
answer.
In terms of introducing ‘a new tenancies’ and ‘al tenancies’ distinction, the FMB supports the
premise that natural trigger points should be leveraged where possible. These represent
moments when the property is most likely to be empty. Thorough retrofit projects can be
disruptive to households, and it is therefore advisable to deliver these works while the
property is unoccupied.
Promoting retrofit upgrades while more general home improvement works are being carried
out would be an approach that is sensitive to the way that the market currently operates.
Research by the University of East Anglia found that just 1 in 10 consumers would consider
retrofit-only upgrades, and this is supported by qualitative feedback from our members.
In terms of the timeline for introducing PRS regulations, this must be sensitive to the time it
takes for the supply chain to grow, particularly with regards to the availability of skilled
labour, to be able to deliver these measures in a way that ensures quality.
The complex and bespoke nature of retrofit necessitates experienced and qualified
professionals. This means tradespeople risk being drawn away from competing sectors like
house building and industrial/commercial into the retrofit sector.
This would compound the existing skills shortage in construction, and risk hampering
delivery of the Government’s competing policy priorities.
Research by the FMB found that in
September and October 2020, 1 in 3 builders (29%) were struggling to hire bricklayers, and
1 in 4 (35%) were struggling to hire carpenters. 13% were struggling to hire plasterers and
the same number were struggling to hire general labourers.
More young people and career switchers must be encouraged into construction so that the
overall volume of industry output can be maintained and grown. It typically requires two
years to train an apprentice in a core trade such as bricklaying, carpentry and plastering, and
the timetable for implementation must acknowledge this.
The timeline must also acknowledge that experienced tradespeople may need to complete
additional qualifications to be able to complete retrofit works and gain the relevant
qualifications. While upskilling on short duration courses demands less time than an
apprenticeship, courses such as heat pump installation or Retrofit Coordinator should be
fully funded and readily available to the industry to remove any barriers.
A skills strategy should be published and launched at the same time as the new regulations,
to provide the support that is needed to business.
Question 7: Do you agree with increasing the cost cap to £10,000 inclusive of VAT as our
preferred policy proposal? If not, please explain why not and provide evidence with your
answer.
2
Evidence provided by the Northern Housing Consortium and given to the Environmental
Audit Committee as part of their inquiry into the energy efficiency of existing buildings found
that the cost of retrofits per property could be as high as £24,300, in stark contrast to the
£4,700 estimated by BEIS.
It is important that the policy recognises that £10,000 will not, in some cases, be sufficient to
deliver the package of works that is needed. A more tailored approach, where the cost cap is
responsive to the size and age of the house would create a more meaningful benchmark for
landlords. The amount needed to be spent could be set according to the initial assessment
of the property, in accordance with the whole house retrofit approach as stipulated by PAS
2035.
The labour element of the installation of energy efficiency improvements should be exempt
from VAT to make more finance available for installing the retrofit measures. The impact of
the VAT exemption should be closely monitored and extended to other sectors such as the
owner-occupier sector if successful in driving up the level of retrofit works undertaken.
Question 8: Should the £10,000 cost cap be adjusted for inflation?
It is intended that as the market develops, retrofit works will become more cost effective.
However, adjusting the cost cap for inflation would maintain the level of resources available
to commit to retrofit.
Question 9: Should a requirement for landlords to install fabric insulation measures first be
introduced? If yes, when, and how should such a requirement be implemented? If no, what
are the alternative installation methods that maximise energy efficiency outcomes? Please
provide evidence to support your answer.
The policy proposal notes that ‘fabric first’ is not a set term, nor defined in legislation. It
would be helpful if this term was defined so that it can be referred to as part of this policy
development, and also as part of the Future Homes Standard development.
The FMB supports a ‘fabric first’ approach to retrofit. This is because it is the most
sustainable approach, requiring less, lower energy usage and therefore lower running costs
for tenants.
Any tightening of fabric should be accompanied by greater ventilation, and measures to
reduce over-heating in the summer. These two areas should be treated holistically, and the
building is treated as a system, to avoid unintended consequences.
Chapter 2
Question 10: We would welcome views on the alternative of a dual metric target to reach
both EER Band C cost metric and also EIR Band C carbon metric, with an increased cost
cap of £15,000 inclusive of VAT.
The FMB supports the proposal to measure improvements to both the energy efficiency of
buildings in the PRS sector, and their environmental impact. These metrics are important to
achieving net zero carbon emissions by 2050 while also tackling the key issues of fuel
poverty and addressing health issues related to cold homes.
If this approach to the PRS regulations is adopted, the FMB would advocate for a skills gap
analysis of assessors, to ensure that there are enough assessors with the appropriate skills
to carry out both these surveys and ensure that accurate information is in place.
3
The proposal should bear in mind that adding an additional metric into the retrofit process
risks adding another layer of bureaucracy and cost. The PAS 2035 approach to retrofit
requires engagement with a range of consultants including Retrofit Co-ordinators, assessors,
designers etc. and the policy should be sensitive to not introducing additional layers of
consultancy fees and extra steps in the delivery process that could hamper output.
Question 11: Should government introduce an affordability exemption? If so, we would
welcome views on how such an exemption should be designed and evidenced, and any
potential impacts on the PRS market.
N/A
Question 12: What should the eligibility criteria be for an affordability exemption if it is
introduced, and how can the criteria accommodate fluctuations in a landlord’s finances
and/or in the value of a property? Please provide evidence to support your answer.
N/A
Question 13: Should we incorporate TrustMark into energy performance improvement
works? If not, please explain why not and provide evidence with your answer.
It is very important that the PRS regulations require builders carrying out the installations to
be TrustMark accredited and adhering to standards PAS 2030/ 2035. This will ensure that
work is completed to a high standard, and will avoid unintended consequences of poor build
quality. This will also provide a route to redress, should it be needed.
Currently, there is no barrier to entry in the construction sector. Making retrofit works
accessible to rogue traders looking to profit from the scheme, particularly if there is public
funding involved, risks significant reputational damage to the construction industry and loss
of public confidence in retrofit. Retrofit is complex, and should only be conducted by
experienced and accredited builders. Allowing landlords the option of going for a cheaper,
unregistered builder will lead to negative stories about retrofit in the media. The FMB is
lobbying for a mandatory licensing scheme for UK construction companies to address these
issues, working with TrustMark and others, but it is outside the scope of this consultation.
Publicly announcing that the PRS regulations require the use of TrustMark-registered
builders could help to increase installer uptake in the Green Homes Grant scheme.
Currently, members of the FMB are, in general, not seeking accreditation for the Green
Homes Grant scheme because the time and financial requirements. This is despite the FMB
being the largest TrustMark provider, and our steps to encourage members to take part. The
hurdles are deemed to be too onerous, and not equivalent to the potential pipeline of work
offered by a relatively short-running scheme. For example, one FMB member based in the
Wirral estimated that it will cost him £26,000 and 160 hours work to become accredited for
the scheme. The PRS regulations represent an additional pipeline of work that would
incentivise builders to get accredited for both initiatives.
To support this, the Government must work with TrustMark to set up a clear framework and
guidance for helping builders on to the PAS standard. This should include clear, publicly-
available information, and flowcharts demonstrating how businesses achieve PAS in plain
English. It should also include the provision of publicly-funded and readily available training
courses to ensure all builders have access the necessary qualifications. Government
communications should not make reference to a five day waiting time for gaining
accreditation to the scheme, as have been used in the case of the Green Homes grant
4
scheme. The FMB feels that this is misleading, because it does not account for the PAS
accreditation.
Question 14: What role can the private rented sector play in supporting the rollout of smart
meters and what are the barriers and possible solutions to achieving this?
N/A
Question 15: We would welcome views on whether the PRS Regulations may need to be
tightened further for the 2030s? Please provide evidence with your answer.
Yes, the FMB believes it would be important to review the regulations from 2030 to ensure
that the housing stock is fully decarbonised and contributing to net zero carbon emissions by
2050.
Chapter 3
Compliance
Question 16: What are the other steps government could take to increase awareness and
understanding of the PRS Regulations?
Understanding of retrofit among the public is relatively low. Research by
NatCen for BEIS
found that the contribution of homes to climate change is not fully understood. Respondents
to the NatCen survey rated heating and cooling in buildings 6.4 out of 10 in terms of its
contribution to UK carbon emissions, but realistically this should be nearer to 8 out of 10.
83% of the
Climate Assembly agreed that ‘information and support funded by Government’
is an important element of decarbonising heating and energy in the home. 72% said
‘information or support provided by Government’.
The Government should fund and deliver a public awareness campaign improving
understanding of firstly the impact of heating homes on the environment, and what retrofit
means as a solution to this. This should not be limited to landlords. Utilising retrofit case
studies provided by representative organisations, like the FMB, would help to contextualise
these types of work and provide a human example. For further details see the recently
publishe
d National Retrofit Strategy adopted by the Construction Leadership Council.
Question 17: Is the introduction of a PRS property compliance and exemptions database
necessary to help local authorities to proactively enforce minimum energy efficiency
standards? If yes, should we include the per-property registration fee within the cost cap? If
not, what alternatives to a PRS property compliance and exemption database would you
suggest?
The proposal should consider the extent to which Building Control should be the mechanism
for enforcement and compliance. Building Control represents a pre-existing function of the
local authority, already holding the necessary and relevant expertise to sign off these works.
As Building Control will already be required to supply a sign off on building projects, this
would streamline the process and incorporate a minimal cost for the landlord. This would
also help with providing more data on the type of work being done.
Questions 18 – 32
N/A
5