Tenants home in on bills

New research shows that 79% of renters are worried about the cost of their household bills. This is at a time when bills are a hefty slice of UK households' expense budget, with the average UK household currently paying the equivalent of 20% of the average rent (£6760) on their gas and electricity bills (£1360).

With the number of new tenancies mounting - by 20% in the past three months - and with fuel bills continuing to rise, landlords will want to appeal to the growing supply of tenants and respond to their concerns over fuel bills:

- after location, household bills are now the most important factor in choosing a property to rent - 22% saying that the level of household bills had an ‘extreme effect' in their decision-making

- whilst noisy neighbours, permission to paint on the walls and aspect of houses feature highly in rental decisions, it is financial concerns which top the chart of questions to ask landlords - over a third (35%) of renters rank council tax in their top three factors to ask landlords, and 34% rank household bills in their top three factors

- over a quarter (27%) of renters regretted that they hadn't found out about the level of household bills beforehand, and wished they'd asked their landlord when looking for the property

Despite renters losing sleep over bills and the ability to save £300 a year through energy efficiency measures, 77% of renters believe that their landlords don't care about energy efficiency. Landlords may not be banking on the potential to reduce household bills, and attracting tenants wanting more cash in their pockets. What's more, help is at hand for landlords, offsetting the cost of installing energy savings measures against income tax.

This comes at a time when Energy Performance Certificates are being introduced to the rental market. From 1st October 2008, an EPC will be required for all new tenancies signed on or after this date. Valid for 10 years, the EPC will provide landlords and tenants with information on the energy efficiency and carbon emissions of their property in an easy-to-understand fridge-style rating of A-G. As part of the evaluation, the assessor will also provide a list of recommendations suggesting cost effective improvements to raise the property's energy efficiency.

Since being introduced in 2007 for homebuyers, more than one million Energy Performance Certificates (EPCs) have been produced and registered in England and Wales - with the average rating being ‘D'.

Communities Minister Iain Wright said: "Energy Performance Certificates offer tenants and landlords a real opportunity. The certificate provides clear information on a building's energy efficiency and recommends cost effective improvements. The EPC should be welcomed by tenants who are looking for better value and more energy efficient rental properties, as well as landlords who are, more than ever, keen to attract responsible and committed tenants."

David Salusbury, Chairman, NLA: "Rising energy prices and leaner economic times mean tenants want to live in properties which are fuel efficient and don't waste money. Now, landlords in England and Wales will have to provide this critical information up front, enabling tenants to make more informed decisions about where they choose to rent. Landlords who own properties without proper insulation or older, inefficient boilers could find tenants are looking for energy efficiency and ever-cheaper fuel bills."

Ian Potter, Head of Operations, Association of Residential Letting Agents: "Landlords should get their EPCs sorted out as quickly as possible so that they are ahead of the game when it comes to re-letting a property. Every landlord hates void periods and needs to be in the position to react quickly when an existing tenancy ends. Equally, tenants may be interested in energy efficiency - some for green motivations, but more as indication of their fuel bills. A happy tenant is a longstanding one."

On 17th September, a new national newspaper and radio advertising campaign began targeting in particular landlords and tenants of all properties. The aim is to raise awareness of the obligations across all sectors to get an EPC, as well as the right to see one. It forms a key part of the cross Government campaign to Act on CO2. In addition, new guidance and leaflets for tenants and landlords have also been published and are available on the Communities website.

This is part of the wider roll out of the Energy Performance of Buildings Directive with commercial EPCs and Display Energy Certificates (DECs) for public buildings also coming into force today.