News

By Giulia Mininni

With winter at the horizon, improving the energy efficiency of housing is crucial, especially given the current energy and living cost crises. The UK has one of the oldest housing stocks in Europe, which contributes to low energy efficiency. Residential emissions have risen from 15% to 17% of the UK’s total emission between 2019 and today. The private rented sector (PRS) faces the most challenges in adopting energy efficiency measures, compared to social housing and owner-occupied homes. The PRS sector has the worst housing conditions in the country, with the English Housing Survey estimating that 23% of PRS homes did not meet the Decent Home Standard. Energy efficiency in the PRS is strongly linked to these housing standards and the need to improve housing conditions.

Narratives around landlords’ decision-making in retrofitting

A specific challenge is that while homeowners directly benefit from upgrades, in the PRS, it is tenants who enjoy improved comfort and lower energy bills. This creates ‘split incentives’, as landlords are less motivated to invest in energy efficiency measures since tenants are unlikely to pay higher rents for these upgrades. Due to this dynamic, policy frameworks aimed at improving energy efficiency in the PRS are often less effective, leading to lower energy efficiency in rental properties compared to owner-occupied homes.

Another major barrier to retrofitting is the lack of trust between landlords and institutions like local authorities. Many landlords feel disconnected from government processes, making it difficult to access grants or financial support. There is also mistrust towards tradespeople due to a lack of transparency and competency in retrofitting processes, which further slowdown retrofitting efforts.Ruth Bookbinder Anne Owen

The retrofitting policy landscape

UK retrofit policies often assume that financial incentives, such as tax breaks or subsidies, will lead to predictable, rational investment in energy efficiency. However, this one-size-fits-all approach ignores the complexity of people’s decision-making. Traditional economic models, like those underpinning Green Deal and the Green Homes Grant, expect homeowners to make financially driven decisions. However, these models fail to consider the role of social contexts in decision-making.

In reality, people’s choices around retrofitting are more complex than just seeking the best economic opportunity. This complexity has made it difficult for to incentivise private investment at the level needed to meet the UK’s climate goals. For example, the Energy Companies Obligation (ECO) scheme, which began in 2013, shifted from supporting deep retrofits to helping low-income households. The program’s scope has reduced over time, and many people have dropped out. While the Feed-In Tariff for solar panels (2015–2019) was successful, newer programs like the Boiler Upgrade Scheme have gained less traction. Additionally, most research and policies focus on owner-occupied homes, with less attention on retrofitting rental properties, leading to a gap in PRS-specific retrofit policies.

Landlords’ counts from Brighton and Hove

Our new research in Brighton and Hove highlights how relationships play a central role in landlords’ decision-making processes. Landlords don’t make retrofitting decisions in isolation, they are influenced by their social networks: including tenants, tradespeople, and family members. For example, some landlords found retrofitting opportunities through trusted advice from tenants or family support, while bad advice led to poor outcomes. This demonstrates the importance of ‘relational work’, which shows how economic decisions are shaped by social relationships.

Place-specific factors also play a critical role in retrofitting decisions. In Brighton and Hove, the local property market, climate, and the presence of heritage buildings influence landlords’ willingness to invest in retrofits. For example, heritage buildings may require special retrofitting options to maintain their historic appearance. These local considerations are often overlooked by broader retrofit policies that apply standardised approaches, failing to meet the specific needs of different areas. While landlords generally reported good relationships with tradespeople, their interactions with institutions were less positive, further complicating retrofitting efforts in the PRS.

Hence, policies to encourage retrofitting should be more tailored to the specific social and regional factors influencing landlords’ decision-making. A more effective approach would be a central strategy that allows flexibility for local policies to address regional needs. Tax incentives, such as reductions in stamp duty, VAT, or inheritance tax, could encourage landlords to retrofit their properties as part of broader renovation projects. Tradespeople could also be incentivised to promote retrofitting alongside other building works. Policymakers should recognise that landlords are not a uniform group and may require different strategies depending on their circumstances.