As Rishi Sunak recently scrapped the long-discussed proposals to increase the minimum EPC rating for domestic rental properties, many landlords may be tempted to put energy efficiency upgrades for their rentals on the back burner—leaving tenants to deal with the expensive aftermath.

With the PRS seemingly taking a step backwards on the journey to sustainability, is this just a bump in the road, or a sign of things to come? We set out to find the answer to this question, together with five industry experts, and highlight what is needed to get landlords to embrace and drive the green agenda.

Although the government has chosen to take a more relaxed approach to sustainability in the PRS, specialist finance lenders are still here to provide finance to support landlords keen to continue upgrading their properties. We take a look at the latest green BTL products available in the market, and talk exclusively with Redwood Bank about its recently launched green cashback offer and the reasons behind its creation. Plus, Leaders Romans Group’s director for property management shares some insights about why making rental homes more energy efficient is a wise investment.

The road to sustainability will be long and hard for sure. However, with the climate change threat looming over the UK and the entire world, it is a journey that we must take—something many BTL industry experts agree on. How the PRS will eventually reach the sustainability panacea, only time will tell.

Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group:

"Individuals who invested their hard-earned money to provide housing to thousands are now forced to weigh the risks against the rewards, often with a heavy heart.

"The bonds built between landlords and tenants, the trust formed over years of mutual respect, and the symbiotic relationship that lies at the heart of the rental market, are now at risk.

"Landlords aren't mere property owners, they are the custodians of dreams, creators of homes, and the pillars of a functioning society that has relied on private money to house the millions."

Anna Clare Harper, CEO at investment adviser GreenResi:

“This increase in private rents is no surprise in the context of public policy — for some years, housing policy has focused on the needs of homeowners, on debt to fund new supply, and on increasingly stringent regulations designed to make the PRS more professional.

“So what’s next? As landlords exit en-masse, even less rental housing will be available, and we can expect even greater rent price increases.

“The solution is not further regulation or rent caps, but encouragement to professional investors to recapitalise the PRS and take the place of traditional side-line landlords as happens in countries with thriving rental markets.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman: 

“Shortage of stock is continuing the upwards pressure on rents at a time when students are adding to tenant numbers.

“The burden of higher mortgage rates, as well as tax and regulatory issues are persuading landlords to quit the sector, which is not helping keep rents in affordable territory. 

“However, we have noticed the difference between the rents charged on new tenancies and those who are renewing existing arrangements as tenants are reaching an affordability ceiling.

“Landlords recognise the importance of reliable, long-term tenants rather than maximising their returns unless, of course, their costs are getting out of hand.”

Harriet Scanlan, lettings manager at Richmond estate agency Antony Roberts:

“We are still very much in the grips of a stock-deprived market.

“One of the primary drivers for private landlords exiting the BTL sector are changes in tax regulations, primarily the reduction of mortgage tax relief.

“The interest rate hikes have also had a direct hit on some landlords’ profit margins. 

“However, those landlords who are able to hold their nerve are being rewarded with minimal-to-no void periods and escalating rental prices.”

Graham Cox, founder of Self-Employed Mortgage Hub:

“Rents continue to surge to astronomical levels, driven by a mass exodus of landlords from the PRS, a lack of social housing and unaffordable house prices.

“What a mess — this is the result of years of not just a lack of strategic housing policy, but a lack of care from this government for its population."