THE question of what ownership of real estate means in the UK is becoming ever more vexed. You may have your name on the title deeds, but whether you have any control is moot.
Successive UK governments have fought property owners hard over taxations of all kinds. The Uniparty loves to play games with real estate charges, both at local and central government level. In the 2020s, government attacks on real property have taken on a new shape. With Net Zero by 2050 a done deal, the spotlight has fallen on the requirement to control emissions from domestic properties. The march towards forcing property owners to make physical alterations to their buildings for the benefit of the climate lobby is in full goose-stepping mode.
What our nominally Conservative government seems to be proposing is that all UK domestic rental properties meet Energy Performance Standard grade C (on a scale of A to G, with G the lowest) by 2025. Although not formalised in legislation yet, we can see that any choice by the owner and tenant as to how they deal with heat retention is irrelevant. Possession of real estate has become a millstone rather than an investment.
Those who support the government measures brim with excitement at the prospect of reduced heating bills for renters and ‘doing our bit’ for climate change. With depressing predictability there has been no accounting for the costs associated with the forced infrastructure changes to building. As is so often the case, Net Zero zealots assume that the benefits they seek come for free. They don’t.
The average cost of the infrastructure changes to attain EPC grade C have been estimated at £5,000 per property. The specific cost for an individual property could be a lot higher if a ground or air source heat pump is required. This must be seen in the context of many other costs that have heaped on to landlords’ shoulders recently. From electrical certificates to carbon monoxide detectors, there is a seemingly endless list of ‘freebies’ which the landlord has to provide to the tenant.
The wider costs and impacts of forcing insulation changes en masse on the UK’s rental housing stock are legion. And as is so often the case with government regulations, it is the unforeseen consequences which will most likely hit our economy in the most powerful way. Of the outcomes that can easily be foreseen, most obvious is the further diminution of the residential rental stock for England and Wales. Landlords simply sell up to avoid more and more regulation. Or where possible, the house becomes a holiday let. In the past couple of years rents have risen above and beyond the means of many renters to pay. On average, rents are rising at 10 per cent per year because of the lack of rental stock.
As the owner of a letting agency in the North West I have already witnessed the chill that the threat of EPC C has sent through the lettings market. The threat of new regulations (on top of the existing stack of 179 laws that affect residential lettings) has proved to be too much and former rental houses are being sold. This has been repeated up and down England and Wales with the resultant drop in rental stock causing chronic supply shortages, driving rents for even the dingiest studio flat to dizzying heights.
When a country has few houses for rent, the dynamics of the economy are curtailed. Need to move quickly for a new job? Forget it – there is no house available for rent. Looking to move to a rental house while you spend a few thousand quid doing up your current abode? Not viable because rents are so high in all sectors. A thriving rental market drives a thriving and trading economy. The inverse is also true.
I remember the time when keeping high decorative standards and rapid maintenance was a key priority for my client landlords to ensure that properties remained tenanted. Now this has changed. The free market for rental property is gone. Tenants must accept the base level flats and houses, with maintenance done as thriftily (and sometimes slowly) as possible. Speed is no longer of the essence. Saving money is what counts. There is no longer a threat of rental void for the landlord, so no need to bother maintaining high standards.
Further negative consequences of the drive to energy efficiency are visible. Dilapidated buildings which might once have been snapped up by landlords, renovated and let out still sit idle because of the potentially tremendous cost of achieving EPC C alongside other regulations and the threat of more to come. Meanwhile first-time buyers lack the capital and contacts to get the work done. This has a visible effect on neighbourhoods when drug dealers and vagrants move in.
The outcomes of proposed EPC regulations for domestic lettings are also being felt by renters. Already forced towards drastic cut backs on heating and lighting usage (also due to the relentless folly of Net Zero), rents continue to rise. The option to shop around for better accommodation has mostly gone. Soon many will be forced to sit tight while builders rip the house apart to achieve spurious and inconsistently measured EPC targets. Once the work is completed the rent will need to rise again to pay it. A ground source heat pump may have been installed. Wanted by neither the tenant nor the landlord, it will likely cost more to run due to high electricity costs.
So far there is no sign that the UK Uniparty trusts free markets at all. In every possible area Sunak, Gove, Starmer, Miliband et al trust only central planning and state control. An Englishman’s home is no longer his castle.