The UK faces a housing crisis. There seems to be general agreement about that. A report added to the House of Commons Library a little over a year ago recognised the problem, and cited another report, which suggested that in England alone 340,000 new homes a year are required.

There are many issues here, including the balance between home-owners and renters; a steadily rising population exacerbated by net immigration; poor quality housing stock; the hangover caused by Thatcher’s sell-off of council housing (a policy subsequently adopted by Tony Blair when Labour Prime Minister); high house prices, fuelled by years of ultra-low interest rates and quantitative easing; and high rental levels. It’s a sorry picture, to which we can add another issue, namely the limited amount of housing stock that is available for rent.

An article on the BBC website today is headlined “Renting: Number of UK homes available down by a third”. A casual reader might assume that the housing stock owned and let by landlords has fallen by a third, but apparently this isn’t the case. The key word is “available”. The article tells us that the number of homes available to rent in the UK has fallen by over a third in the last eighteen months, and the inevitable result of demand exceeding supply has been to push up rents for new tenants by 11%. The issue, we are told, isn’t that the number of properties has fallen – they have remained at a fairly constant level since 2016. Rather, the issue is far more people chasing broadly the same number of properties.

We are also told that rising interest rates add to landlords’ costs, and this is an extra factor driving higher rents. It seems that the Government has recognised the problem of rents being driven up to unsustainable levels, and we are told that it is to “introduce a new Renters’ Reform Bill in England before the summer, which it says will redress the balance in the market and provide more security for tenants.”

It’s good to know that politicians are aware of the problems, and are taking steps to deal with them. But then they go and spoil it all by doing something stupid. And of course, it’s our old friend “net zero” that’s going to exacerbate an existing problem. This week a story appeared on the Daily Telegraph website under the heading “Landlords to get five years to hit net zero targets – Buy-to-let investors face spending thousands of pounds on retro-fitting properties”. If the Daily Telegraph has the right of it, this is the story:

Landlords will be blocked from letting properties unless they upgrade them to meet net zero energy efficiency targets within five years.

Ministers are poised to announce that landlords will have to spend thousands of pounds increasing the energy performance of their properties by 2028 – or face a fine of up to £30,000.

It is understood that the Government plans to force up to two million landlords to increase the Energy Performance Certificate rating of their properties to a minimum of a C standard to help reduce the nation’s carbon footprint.

It means buy-to-let investors could have to spend thousands of pounds installing insulation or eco-friendly devices such as heat pumps and solar panels to make their properties more energy efficient.

Currently, all privately rented homes in England and Wales need to meet a minimum energy performance of band E before they can be let.

Ministers had previously proposed a deadline of 2025 for newly-let rentals to achieve an energy performance rating of at least a C, and a deadline of 2028 for all other rented properties.

Given that many private landlords don’t own their properties outright, and have borrowed heavily against their buy-to-let portfolios they, like all borrowers, are being hurt by the recent rises in interest rates. Many are leaving the market already. The BBC article cited above tells us:

Large numbers of landlords are leaving the market – 11% of homes for sale on Zoopla were previously rented.

For others, short-term lets, such as holiday lets or Airbnb, offer better returns than long-term tenants. Zoopla has seen a three-fold increase in short-term lets since 2019.

I can think of little better calculated to encourage hard-pressed landlords to sell up than the Government’s plans for the rental sector, driven by the obsessive dogma of net zero. I suppose this is what happens when we have career politicians, many of whom have never had a “proper” job, and who have little understanding of how the world works. The only positive I can derive from all of this is that the problems it will cause should rapidly become self-evident, and perhaps – just perhaps – it will be another nail in the coffin of the net zero folly.

23 Comments

  3. It seems I’m not alone in drawing the blindingly obvious conclusion. Here’s a letter in the Telegraph:

    https://www.msn.com/en-gb/money/other/letters-landlords-will-simply-sell-up-rather-than-meet-new-net-zero-targets/ar-AA19eQOZ

    SIR – Have ministers thought through the consequences of forcing landlords to improve the energy rating of their properties (report, March 29)? Many will consider the cost prohibitive when added to the increasing cost of mortgages and other proposed regulations, so will sell their properties.

    This will result in fewer properties being available to rent and those that remain will undoubtedly be subject to price increases.

    The majority of tenants rent because they cannot afford to buy, and a considerable number rely on benefits to pay rent due to the dearth of social housing. Where are these people to go once their landlord sells up?

    The drive to improve the rental market and increase energy efficiency is to be applauded, but not before alternative accommodation is available for those who are displaced as a result.

    Liked by 1 person

  4. Slightly off-topic. There is a real shortage of rental properties already, and some obvious solutions. It seems that landlords are increasingly eschewing long-term lets in favour of Air B’n’B weekend lets – which naturally has obvious pros and cons. Some local authorities are beginning to charge more council tax on second homes, partly in response to the problems of dead villages in the middle of winter and a lack of available housing for locals. There are some trendy coastal villages in Norfolk that are seemingly largely abandoned out of season. At the moment I have heard anecdotes of some folk re-badging their main home as their second home and vice-versa in order to avoid the extra council tax levied on second homes where their (original) second home is. I have also heard similar anecdotes of people buying second homes in far-off places (northern Scotland) and spending a fortnight there in summer, leaving it empty the rest of the year.

    Liked by 1 person

  5. The ever-sensible Douglas Fraser gets it:

    “Rental health: Scotland’s landlords versus the rent freeze”

    https://www.bbc.co.uk/news/business-65148719

    …The views of landlords are strong. The controls being used this year mean they absorb rising costs. That puts a squeeze on profits, which may not get much sympathy when it can be perceived as ‘unearned income’, but it is expected to have a detrimental effect on the market.

    They are facing much higher borrowing costs since interest rates started their rise to the 4.25% Bank of England base rate. Regulation has piled up, much of it to ensure safety for tenants, but that comes at a cost. The Treasury opted to phase out mortgage tax relief, making ownership for renting a lot less lucrative. And now… rent controls.

    David Alexander, founder and boss of DJ Alexander, which includes an agency for managing 1200 homes in Scotland on behalf of landlords, says some are choosing to cash in and put their investment into other assets. For every one client he signs up, he says three are exiting the market….

    Liked by 1 person

  6. I believe the agenda here is to drive out smaller, independent landlords in favour of corporate entities, who can absorb these extra costs and still make a profit. We used to let out our flat in Peckham. We got on well with our tenants and provided a very personalised service. That era is now gone. Big corporations are muscling in on the rental market, assisted by government regulations and red tape.

    Like

  7. Jaime,

    I suspect the same is true across the board, though private landlords are increasingly feeling the pressure now. I wonder why anyone has the determination to set up a business these days – the powers-that-be seem determined to make it a nightmare at every turn.

    Liked by 1 person

  9. Not a cat in Hell’s chance, Mark.
    Not only are they unable to afford it, even if they could afford it there isn’t the workforce available to carry out the necessary installation nor the equipment and materials necessary either.
    Nut Zero is a bust.

    Like

  11. “Renting: Shortfall of properties creates frenzied market, surveyors say”

    https://www.bbc.co.uk/news/business-65252376

    A shortfall of properties to match demand from tenants – causing a rise in the cost of renting – is striking in its consistency, surveyors say.

    One agent said the rental market in his area was “frenzied” owing to fierce competition for homes among tenants.

    The Royal Institution of Chartered Surveyors (RICS) said the proportion of its members reporting growth in demand was at a five-month high in March.

    Rents are expected to rise across the UK, averaging a 4% annual increase.

    Simon Rubinsohn, chief economist at Rics, said the rental sector was constrained by a lack of homes. Surveyors reported that tax and regulations were leading many landlords to consider whether to continue or sell up.

    Andrew Oulsnam, a surveyor in Birmingham, said that demand for properties far exceeded supply, with many landlords deciding to sell whenever a tenant left.

    “There is no end in sight for a serious shortage of properties to rent,” he said.

    What a good idea to impose extra net zero burdens on landlords at great expense to them just at the moment when many are already getting out of renting or are seriously thinking about it.

    Like

  12. So what happens to these properties after they have been sold?
    I guess that they either become owner-occupied or are relet. I can’t see them being left empty for any length of time.
    Of course a few of them could be used for high value incomes, like brothels or canabis farms.

    Like

  13. Bill, if they are bought by people to live in, there is an argument that the overall housing stock is unaffected, albeit tilted away from tenants to owner occupiers. The problem is that many seem to be turned into holiday lets and Air B&Bs, in which case the total housing stock is reduced.

    Like

  14. “How net zero risks intensifying the rental crisis”

    https://capx.co/how-net-zero-risks-intensifying-the-rental-crisis/

    …I find it curious that the connection between soaring rents and climate action has not yet received more attention. I refer to the requirement that all buy-to-let properties must now have an energy performance certificate (EPC) of “C” or above by 2028. The logic here is simple enough – more energy efficient houses require less energy to heat, and so save on emissions, thus helping on the demand side of the net zero equation.

    The problem is that in many cases this means expensive retrofitting of old housing stock. Rather than bearing that expense, some landlords are selling up and exiting the market altogether, reducing already constrained supply yet further….

    …The range of factors in play makes it hard to work out the precise effect on rents of the EPC requirements. But talk to any landlord and it becomes apparent that it is a major factor in their weighing up whether or not to exit the market.

    For example, I know one landlord who is contemplating having to pay £25,000 to upgrade the energy rating of a two-bed flat in a booming Sussex seaside town. The estimated saving is £81 a year. In other words, it would take the landlord 309 years to break even on their investment.

    If they want to break even over a more realistic timeline, they’ll have to raise the rent: by £410 a month to break even after five years, say, or by £200 a month after 10 years. In either case, they might very well have to find new tenants. This is hard luck for the current tenants, who will probably have to downsize or move to a less desirable locale – all in the name of net zero, whether they realise it or not….

    Like

  15. “Labour confirms plan to stop landlords renting poorly-insulated homes”

    https://thenegotiator.co.uk/news/regulation-law-news/labour-confirms-plan-to-stop-landlords-renting-poorly-insulated-homes/

    Labour minister Ed Miliband has told Labour supporters that landlords will be prevented from renting out homes that are under an EPC rating of ‘C’ from 2030.

    Although the policy had been discussed publicly before by Miliband, who is Energy Security and Net Zero Secretary, he used his Labour Party Conference speech to launch a vitriolic attack on landlords who rent sub-standard homes, and warned of going ‘much further’….

    ...Chris Norris, Policy Director for the National Residential Landlords Association, says: “The NRLA wants to see all rented properties become as energy efficient as possible.

    “However, the Government’s approach must involve a clear and comprehensive plan which recognises that the sector has some of the oldest, and hardest to improve, properties in the UK’s housing stock.

    “The sector needs a clear trajectory setting out what will be expected of it and by when. This plan must also ensure enough tradespeople are in place to undertake the work that will be required.

    “Alongside this, as the Committee on Fuel Poverty has warned, is the need for a financial package to support investment in energy efficiency measures.

    “At present, the private rented sector is the only housing tenure without a bespoke package to support work to upgrade homes.”

    Only a month ago estate agency Hamptons warned that it would take far longer than six years to upgrade all the nation’s sub-standard homes to a ‘C’level EPC.

    Like

  16. “‘Perfect storm’ blocking thousands of desperately needed social homes”

    https://www.bbc.co.uk/news/articles/czegynwy938o

    The article makes depressing reading, but three issues struck me particularly:

    ...In the aftermath of the Grenfell fire, the owners of buildings found to contain unsafe cladding have spent billions of pounds replacing it.

    The National Housing Federation (NHF), which represents housing associations, estimates it will cost their members £6bn….

    It’s not much discussed in the media, but if I understand it correctly, some at least of this dangerous cladding was installed to help insulate the buildings and was part of the net zero agenda.

    …They also say they are spending more money on fixing damp problems following the death of two-year-old Awaab Ishak, who died of breathing problems caused by mould….

    Of course, these damp issues often (not always) arise from poorly installed or inappropriate types of insulation, installed as part of the net zero obsession.

    …Housing associations also say too many of these homes have gas boilers, which don’t fit their plans to be more environmentally friendly. The UK is legally obliged to reach net zero carbon emissions by 2050….

    In the midst of a housing crisis, are Housing Associations really declining to take available properties for no better reason than because they have gas boilers?

    Like

  18. “Labour’s EPC targets will drive housing market into a ‘frenzy’

    Green reforms will trigger landlord exodus and worsen housing shortage, experts warn”

    https://www.telegraph.co.uk/money/property/buying-selling/epc-reforms-unleash-chaos-property-market/

    Ed Miliband’s green targets for landlords will drive Britain’s property market into a “frenzy” and worsen the housing shortage, experts have warned.

    The Government has launched a consultation to overhaul controversial energy performance certificates (EPCs), while the energy secretary wants all rental properties to achieve a minimum standard of energy efficiency by the end of the decade.

    But proposals to favour homes with the “capacity to integrate with smart technology”, or green heating systems such as heat pumps, will leave landlords scrambling to renovate properties or sell up….

    Liked by 1 person

  19. “Miliband and Rayner start EPC clampdown on private rental sector”

    https://www.lettingagenttoday.co.uk/breaking-news/2025/02/miliband-announces-epc-clampdown-on-private-rental-sector-properties/

    ...Ed Miliband’s Department of Energy Security and Net Zero has this morning launched an official consultation on proposals to mandate all private landlords in England and Wales to meet higher energy performance ratings within five years. The government claims the average cost to landlords of complying with the proposals to upgrade their properties is between £6,100 and £6,800.

    The launch statement says: “While 48% of private rented homes in England are already Energy Performance Certificate C or above, ministers now want to ensure this good practice is extended to all properties in the sector, making sure landlords are not undercut, while protecting tenants. As of 2030 all private landlords will be required to meet a higher standard of Energy Performance Certificate (EPC) C or equivalent in their properties, up from the current level of EPC E.”…

    Like

  20. “EPCs to be Used as a Stick to Beat Us

    Revisions to EPC regulations deigned for authoritarian control of our behaviour.”

    https://davidturver.substack.com/p/epc-stick-to-beat-us-energy-performance-certficates

    Conclusions

    Taken individually, most of the proposed measures look to be needless nanny state tinkering, but relatively innocuous. But when taken together, they start to look much more sinister.

    Essentially, the proposals on building fabric and heating systems amount to an attempt to shame homeowners into installing uneconomic insulation measures and heat pumps that may not be suitable for older, less insulated homes. By de-emphasising energy costs as a primary metric, they seem to want us to gloss over the fact that electricity costs about four-times as much as gas per kWh, yet the typical heat pump delivers a coefficient of performance of about three. This means that the running costs of heat pumps, without spending extra on insulation and new radiators are likely higher than a gas-fired boiler.

    The proposal to add Smart Readiness to EPCs is a blatant attempt to force homeowners to install smart meters and appliances so their energy use can be controlled remotely. This is moving towards a level of control that is incompatible with a modern democracy, all in the name of the totalitarian Net Zero agenda. The sticks predicted by the chap from WEF to enforce Net Zero are becoming all too visible.

    Liked by 1 person

  21. “EPC targets will trigger rush of rental evictions, Miliband warned

    ‘Serious concerns’ grow over Labour’s net zero push as landlords are forced into costly renovations”

    https://www.telegraph.co.uk/money/net-zero/epc-targets-trigger-rush-rental-evictions/

    Ed Miliband’s “overly ambitious” energy upgrades will spark a rise in tenant evictions and wreak havoc in the rental market, banks have warned.

    The Energy Secretary wants all private rental homes to have an energy performance certificate (EPC) of C or higher by 2030, while new tenancies must be compliant by 2028.

    But banking lobby group, UK Finance, has raised “serious concerns” over Labour’s net zero push, which is forcing landlords to renovate millions of homes at an estimated cost of £36bn.

    It believes all rented homes will not meet an EPC rating of C until 2043 – 13 years after the Government’s target.

    It said the “one size fits all” deadlines will be difficult to meet due to Britain’s diverse rental housing stock, where swathes of Victorian terraces are commonplace….

    ...The group warned that complex renovation work forced upon landlords will lead to tenant evictions.

    It said: “Properties might need to be vacated for works to be undertaken, potentially leading to the loss of a good tenant, and loss of rent.

    “This level of disruption will be challenging to a significant portion of the private rented sector, especially in regions of England and Wales, such as Yorkshire and The Humber which have lower than average energy efficiency scores.

    “The timescale for transition is challenging and overly ambitious particularly if many properties cannot be improved on time in an economically viable and cost-effective way.”…

    …Due to the age of many properties, even £10,000 would not be enough to achieve a minimum score rating. There are also concerns there are not enough tradespeople to carry out such large-scale renovations.…

    Liked by 1 person

  22. “Landlords Face Higher Bills As New Net Zero Rules Kick in”

    https://dailysceptic.org/2025/06/15/landlords-face-higher-bills-as-new-net-zero-rules-kick-in/

    Landlords are bracing for pricier energy performance certificate (EPC) checks and stricter rules under Ed Miliband’s Net Zero drive, with fears that tougher standards could make thousands of homes impossible to rent...

    …“Costs will rise sharply, and worse still, homes that previously scraped a C rating could now drop to a D, dragging us into yet another regulatory penalty zone. And this is just the warm-up act before the even more chaotic Home Energy Model arrives.”

    Liked by 1 person

  23. “How Net Zero will deepen the UK’s housing crisis

    Ed Miliband’s green diktats could make it ruinously expensive to rent a home.”

    How Net Zero will deepen the UK’s housing crisis

    …The guillotine is the Minimum Energy Performance of Buildings Bill, currently progressing through parliament. When it becomes legislation, it will impose a penalty of up to £30,000 on any domestic property that fails to reach Energy Performance Certificate (EPC) Band C by 2028.

    The legislation is part of a broader push to decarbonise Britain’s housing stock by 2050, a target enshrined in the 2008 Climate Change Act and reaffirmed by successive governments. Yet the practical consequences of this ambition are only now becoming clear...

    Liked by 1 person

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.