Housing and Energy Shifts: UK Rental Market Update (4 December 2025)

This week brings major shifts across the housing and energy landscape. The removal of ECO4 combined with Ofgem’s major grid investment, is set to increase household bills and raise concerns about long-term energy affordability for low-income homes. At the same time, the Renters’ Rights Act is reshaping landlord behaviour, with experts suggesting that tighter rules are driving greater professionalism and prompting some smaller landlords to exit the sector. Meanwhile, major redevelopment plans in London underscore the capital’s ongoing push for regeneration and new housing delivery.

The Top Headlines

1) ECO4 scrapped: low-income households and landlords will lose key support
The government will end the £1.3bn-a-year ECO4 energy-efficiency scheme by March 2026, replacing it with a slimmer Warm Homes Plan that offers less funding for private landlords and homeowners. Critics warn the move will leave many low-income households in cold, poorly insulated homes and could wipe out a large chunk of the retrofit sector, with almost 40% of businesses at risk of closure. Source

2) Renters’ Rights Act likely to make landlords more selective about tenants, lenders warn
According to a statement from Paragon Mortgages, the Renters' Rights Act increases landlords' regulatory exposure and reduces their flexibility to evict which is forcing greater selectiveness and professionalism in the sector. Paragon notes that while professional landlords with multiple properties expect to remain in the sector, many smaller or amateur landlords may exit or tighten their vetting process, especially for riskier tenants. Source

3) UK houses are not getting more affordable, despite what the data shows
Analysts argue that headline ratios showing typical first-time buyer homes at 5.9x earnings, the “best” since 2015, mask the reality that many buyers earn well above average and rely on dual incomes and family help. Mortgage repayments still sit around bubble-era levels and recent rate falls are feeding prices rather than easing costs. Ultimately, leaving most private renters still locked out of home ownership. Source

4) Ofgem signs off £28bn grid upgrade for cleaner power
Ofgem approved a £28bn upgrade to gas and electricity networks. They claim the investment is the most cost-effective way to harness clean energy, boost economic growth and protect the country from a repeat of the gas price shock in 2022. Yet, the cost will be largely fronted by the consumer adding an estimated £108 a year to household energy bills by 2031. Source

5) Minister brands leasehold a “wild west” as FirstPort comes under fire
Housing minister Matthew Pennycook has sharply criticised FirstPort, the UK’s largest residential managing agent managing around 6,000 sites, after widespread complaints from leaseholders about high service charges, poor repairs and aggressive debt collection. He signalled that forthcoming leasehold reform will tighten regulation, including potential licensing and tougher transparency rules for managing agents. Source

6) Plans to move Billingsgate and Smithfield to East London's Royal Docks
The City of London Corporation has announced plans to relocate two of the capital’s historic wholesale markets, Smithfield’s meat market and Billingsgate fish market, to a new site at Albert Island. The scheme will consolidate operations, modernise cold-chain logistics, and free up central urban land for redevelopment, including cultural and residential uses at the old Smithfield site. Local officials say the move will secure the markets’ long-term future and create new jobs in the area, while critics raise concerns about transport impacts and the effect on existing traders. Source

Landlords and letting agents: With stricter PRS rules coming in, and energy bills set to rise, landlords and agents should prioritise compliance, tighten tenant vetting, and review the financial resilience of their portfolios. Upgrading insulation and energy efficiency today paired with an embrace of more efficient, digital workflows will be essential to manage new regulatory demands and stay competitive in a tightening market.