During our interviews, we encouraged interviewees to consider what services, support and organisations they might turn to to help them install low-carbon heating systems in their properties.

Government incentives and financial support

A majority of our interviewees expected some form of government intervention would be necessary to enforce a roll-out of heat pumps across the PRS, with a majority of interviewees expressing a preference for a grant that would make the process cheaper.

Hussein, for example, suggested: ‘there'd have to be some sort of a government incentive to really kind of make people do this, especially if they were targeting landlords [...] either some sort of tax incentive for you to be a landlord or some sort of a financial subsidy for you to go through that road’.

When pressed to give estimations as to the level of support required, some, like Viola and Valerie, declared they would want 70% of the cost covered. Several participants either directly said they would hope for heat pumps to be at cost parity with boilers (Matthew) or, at the very least, were more amenable to the scenario in the event of cost parity (William and Amy).

Several interviewees expressed interest in low- to zero-interest loans to help them finance the cost of heat pumps, with landlords like Dean and Rhoda, mentioning previous experience of using similar offers. Others also mentioned the option of offsetting heat pump installations against tax, preferably as a deductible expense rather than as a capital expense (Rhoda).

Heat-as-a-service offers

In some interviews, we discussed the option of heat-as-a-service style offers and tariffs where heat pump usage would be automated and remotely optimised to guarantee a certain cost. This option was of most interest to interviewees who were already more informed about their tenants’ energy consumption due to being HMO landlords, such as Ted and Mary. The idea of a heat-as-a-service approach resonated most with Ted:

‘The model you spoke about, where a supplier would guarantee you a certain monthly cost and they would optimise the operation of the air source heat pump. That could be interesting, my only provision would be that it shouldn't interfere with my current set-up, because I remotely control all the heating.’

Guidance and aftercare

Multiple participants said they would expect some form of ongoing support from the point of researching and deciding on the best technology for their homes, to aftercare. Consensus on this idea cut across all types of landlords regardless of portfolio size. One landlord, Hussein, mentioned he would be interested in a one-stop shop facilitated by his local authority or government that could inform him on requirements, including planning, insurance, and equipment required to proceed with the installation.

Existing innovation in the PRS has included solutions focused on providing landlords with tailored guidance, such as the South Yorkshire Mayoral Combined Authority’s Net Zero project, an AI-led tailored tool to support landlords with decarbonising their properties. These interviews suggest that demand would exist for innovative services that would target landlords at the purchasing point, or when looking to retrofit their rental properties.

A role for letting agents

Letting agents provide the landlords whose property they manage with extensive support, from information about compliance to sourcing service providers to manage repairs and maintenance. In a future where landlords would need to comply with EPC C requirements, it is therefore logical to imagine a role for letting agents in the decarbonisation process.

When faced with the scenario, a number of interviewees indicated they would turn to their letting agent for support (Viola, Bea and Dean). For example, Bea declared: ‘My assumption is, I would have lent heavily on the agent for their advice or recommendations for that, especially if it's a new regulation coming in, because they're going to have to advise all of their landlords about it.’ Matthew, who was also a letting agent, indicated that he would let landlords who worked with him know about schemes. When talking about the scenario, he also pictured his landlords’ response as: ‘they would just let me take control and get what needs to be done, done.’.

Landlords who managed their properties through a letting agent were overrepresented in our cohort and the role of letting agents in heat decarbonisation would require further testing and validation, but points to a potential avenue for further research.

While regulatory context and opportunities would be crucial to make such a model effective, letting agents’ access to a wide number of homeowners and landlords puts them in a strategic role to accelerate heat decarbonisation - potentially providing a service whereby they would source installers and help coordinate the installation with tenants on behalf of landlords. Their roles could range from informing landlords about decarbonisation schemes and funding, providing information to help towards compliance, to helping their customers plan measures and secure service providers. Encouraging letting agents to take a holistic approach to their portfolio – taking a proactive approach to targeting their customer base with information – could also hold potential as an approach to smooth the process of decarbonisation for those landlords ready to invest in their property in order to secure a long-term income and grow the value of their property.

Several interviewees expressed strongly that a mandate might push them to sell their properties, especially those already considering a market exit (including landlords with larger portfolios like Amy) or those with smaller property portfolios of one or two properties. Property type could be influential: Ted noted he might look to sell his buy-to-lets but that he would retain his HMO properties, which would continue to provide a good return on investment.

While the scenario was mostly intended to allow landlords to imagine a hypothetical process of heat pump installation and what barriers they might encounter, some of our interviewees changed their minds by the end of the conversation - either due to having gained further knowledge about heat pumps or due to becoming aware of existing grants. We noticed this most among participants who had previously invested in refurbishment for their properties and were keen to rent out modern, high-spec properties. Landlords like William became more open to the possibility of installing an air-to-air heat pump in his property, as it was closer in price to a boiler than an air-to-water heat pump. Another example of this change in attitude was Hussein, who concluded the interview by observing that the BUS would likely make the upfront cost more acceptable.