It has been revealed that one in 20 properties in the UK's private rental sector are failing minimum energy standards.
The findings from AXA Direct also reveal that landlords are making progress towards meeting the sector’s required standards.
Generally, an Energy Performance Certificate (EPC) is required for a home that is being put up for rent or sale. The landlord must tell a potential tenant what their property’s energy rating is.
The survey also revealed that tenants living in a ‘Band A’ property are paying around £61 per month for their energy bills, while tenants in a property that is in the ‘Bands F to G’ are paying almost twice that at £112.
Also, the poor insulation of a rental home also leads to other issues for the landlord, including black mould growth and condesnation.
Landlords are making big investments to improve energy efficiency
The managing director of AXA Direct, Gareth Howell, said: “Our study reveals that landlords are making big investments to improve energy efficiency in their properties and it's part of a bigger trend.
“We've seen progress across-the-board on maintenance, security and numbers that have a proper tenancy agreement in place.”
He added that many of the firm's insured landlords tend to be ‘accidental landlords’ with one or two rental homes but they are, largely, professionalising and investing in their tenant’s comfort as well as the health of their property.
The insurer also points out that since 2015, the number of rental properties in the Bands F and G not meeting the minimum energy requirements – which are compulsory from next year – has halved.
Landlords turned off by tenants poor credit score
Meanwhile, 46% of landlords say they would refuse a tenancy application with someone who has a poor credit history.
The findings from Landlord Secure highlight that credit histories do not form part of the regular new tenant checks despite this offering a landlord a better picture of how a potential tenant will make rent payments.
Indeed, letting agents tend to rely on publicly available information, including bankruptcy declarations and County Court judgements, which offers an insight into their applicant’s financial footprint.
‘Those in a rental property have a serious disadvantage’
The firm's managing director, Steve Burrows, said: “Those in a rental property have a serious disadvantage when it comes to building their credit rating because their paying rent on time does not count towards the score.
“Tenants should be given a chance to build a better credit score with their history of paying their rent on time since landlords would then put more weight behind their tenant’s credit score."