REEPS11/2
Key findings
Consideration of key findings from Scenario Modelling Results
This paper summarises the key points made by Adam Krawczyk during the REEPS
Technical Group meeting on 27th January. The points are based on the Scenarios Results
paper produced by the Research Contractors on 21st January 2015.
For ease of reference, the 4 Scenarios considered relate to the following:
Scenario 1:
Scenario 2:
Scenario 3:
Scenario 4:
All G rated dwellings to reach EPC Band F
All G/F rated dwellings to reach EPC Band E
All G/F/E rated dwellings to reach EPC Band D
All G/F/E rated dwellings to improve by 1 EPC Band
REEPS Target Population
The REEPS target population is defined by all private sector dwellings in EPC Bands G/F/E.
The following table shows how many of these dwellings would be affected by each scenario
and also compares them with the total private sector population of 1.925 million in 2013,
(which includes 99,000 vacant private dwellings and second homes).
Dwellings Affected
Scenario 1
Scenario 2
Scenario 3
Scenario 4
29,676
170,708
400,548
400,548
% of REEPS
Target Population
7%
43%
100%
100%
% of total Private
Sector Dwellings
1.5%
9%
21%
21%
Observation 1: There are only 29,676 G rated dwellings that would be affected by Scenario
1. This relates to 7% of the REEPS target stock and 1.5% of the total private sector stock.
Choosing this scenario would show limited ambition for REEPS and would only have
marginal impacts on key outcomes such as fuel, energy and CO2 savings as well as fuel
poverty reductions.
Rurality
Although 42% of the overall REEPS target stock is in rural areas, the rural proportions vary
greatly by EPC Band: (G:67%; F:57% and E:29%). This has a significant impact on the
urban:rural split of the dwellings affected by each scenario, as shown in Chart 1 below.
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REEPS11/2
Key findings
Under Scenarios 1 and 2, the majority of dwellings affected will be in rural areas, namely
67% and 59% respectively. Under scenarios 3 and 4, rural dwellings will make up 42% of
affected dwellings.
Observation 2: There is quite a marked difference in the urban:rural split of dwellings
affected under different scenarios, which may also have wider implications on the
implementation of REEPS.
Tenure
19% of the overall REEPS target stock is in the private rented sector, this proportion varies
by EPC Band: (G:40%; F:21% and E:16%).
This is reflected by the proportion of private rented stock affected under each of the
scenarios, as illustrated in Chart 2.
Under scenarios 1, 2, 3 and 4, the private rented sector makes up 40%, 24%, 19% and 19%
of dwellings affected.
However, the turnover rates in the private rented sector are significantly higher than for sales
of owner-occupied dwellings. For example, the turnover rate of F&G rated dwellings in the
first 5 years is 65% in the private rented sector, compared to 16% for owner occupied
dwellings.
This has a very significant impact on the tenure make-up of dwellings affected by REEPS,
under every scenario, for the first few years, as illustrated in Charts 3 to 5 below.
Observation 3: Under every scenario, the vast majority of dwellings affected in the first year
of REEPS will be in the private rented sector. Indeed there will be more private rented sector
dwellings affected in the first few years than owner-occupied. This means the early success
of REEPS will be heavily dependent on how well it is implemented in the private rented
sector.
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REEPS11/2
Key findings
In the first year of REEPS, the
private rented sector will make up
the vast majority of dwellings
affected, under every scenario:

87% of the 4,520 dwellings
under scenario 1,

77% of the 18,071 dwellings
under scenario 2,

72% of the 39,227 dwellings
under scenarios 3 & 4.
Indeed, it would take several
years before the cumulative
number of dwellings in the owner
occupied sector matches those
affected in the private rented
sector, about:
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
20 years under scenario 1,

between 5 and 10 years
under scenario 2,

5 years under scenarios 3 &
4.
REEPS11/2
Key findings
Scenario 4 – All G/F/E rated dwellings to improve by 1 EPC Band
Chart 6 below shows how the average cost of improvement to raise a property’s EPC rating
by 1 band, increases from £595 for G-rated properties to £1,052 for E-rated properties.
However, the corresponding annual fuel cost savings go in the opposite direction, with
greatest savings achieved for G-rated properties of £510, falling to £208 for E-rated
properties.
This is also reflected in the ‘average capital cost per SAP point increase’, where a lower cost
is seen for G-rated properties (£47), increasing to £89 for F-rated properties and increasing
further to £125 for E-rated properties.
A similar pattern is also observed for primary and delivered energy, although the average
CO2 reduction is greatest for the F to E (3,245 kg pa) improvements, followed by G to F
(2,118 kg pa) and then E to D (1,589 kg pa).
These results will reflect the fact that higher rated properties are more likely to have already
installed cheaper, more cost-effective measures and that further improvements would
require greater capital cost investment, but for a relatively lower return across the key
outcomes in terms of fuel cost savings, primary/delivered energy reductions and CO2
savings (noting that CO2 savings for F to E improvements are higher than for G to F
improvements).
Observation 4: In terms of capital costs, under scenario 4, REEPS would have a greater
impact on dwellings which have already reached a higher EPC rating, whilst the
corresponding benefits would be lower. Could this scenario be challenged as being unfair,
penalising dwellings which have higher EPC ratings, in terms of expecting them to invest
more than lower rated dwellings ?
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REEPS11/2
Key findings
Scenarios 2 & 3
Under scenarios 2 & 3, the lowest rated properties would need to improve by several EPC
bands. For example, under scenario 3, G-rated properties would need to improve by 3 EPC
bands to reach an EPC rating of D, at an average capital cost of £8,320.
Charts 7 & 8 below show the percentage distribution of dwellings in each EPC band, by
capital costs required to reach an EPC rating of D (under scenario 3) or E (under scenario
2).
Charts 9 & 10 show the corresponding information by the absolute number of dwellings in
each capital cost band.
Chart 8: Scenario 2 - % dwellings by capital cost band
Chart 7: Scenario 3 - % of dwellings by capital cost band
70%
70%
£0-£200
£0-£200
60%
60%
£201-£500
50%
£501-£1,000
40%
£201-£500
50%
£501-£1,000
40%
30%
£1,001-£2,000
30%
£1,001-£2,000
20%
£2,001-£5,000
20%
£2,001-£5,000
10%
£5,001-£10,000
10%
£5,001-£10,000
0%
0%
>£10,000
G to D
F to D
Chart 9: Scenario 3 - number of dwellings by capital cost band
100,000
80,000
£201-£500
70,000
£501-£1,000
60,000
50,000
£1,001-£2,000
40,000
30,000
£2,001-£5,000
20,000
£5,001-£10,000
10,000
0
F to D
E to D
F to E
Chart 10: Scenario 2 - number of dwellings by capital cost
band
£0-£200
90,000
G to D
>£10,000
G to E
E to D
>£10,000
£0-£200
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
£201-£500
£501-£1,000
£1,001-£2,000
£2,001-£5,000
£5,001-£10,000
>£10,000
G to E
F to E
The results show that for G-rated properties to reach Band D, under scenario 3:



11,463 (39%) would need to invest more than £10,000
8,722 (29%) would need to invest between £5-£10,000
7,019 (24%) would need to invest between £2-£5,000.
In addition, for F-rated properties to reach Band D, under scenario 3:



12,488 ( 9%) would need to invest more than £10,000
17,018 (12%) would need to invest between £5-£10,000
90,662 (64%) would need to invest between £2-£5,000.
Whereas, under scenario 2, the combined number and percentage of F&G properties that
would need to invest these levels is substantially lower:



473 ( 0%) would need to invest more than £10,000
2,160 ( 1%) would need to invest between £5-£10,000
41,145 (24%) would need to invest between £2-£5,000.
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REEPS11/2
Key findings
Observation 5: When choosing the final scenario, a balance needs to be struck between the
ambition of REEPS, achieving desirable overall outcomes and the potentially high cost
implications, albeit for the relatively small but significant number of G & F rated dwellings.
Adam Krawczyk
SG – Senior Statistician
2nd February 2015
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