Preparing for EPC Changes: What Landlords Need to Know
The UK government has reaffirmed its commitment to creating a more energy-efficient rental sector, with further details emerging on Energy Performance Certificate (EPC) requirements ahead of the 2030 deadline. As part of the government’s ‘Plan for Change,’ these measures aim to lower tenants’ energy bills while ensuring private rental homes meet higher efficiency standards.
What This Means for Landlords
Landlords have been aware of increasing EPC regulations for some time, with the minimum EPC rating for rental properties already raised to an E. The next step will see all rental properties required to meet a minimum EPC rating of C by 2030. This means landlords with properties currently rated D or below may need to invest in upgrades such as loft and cavity wall insulation, double glazing, smart meters, and potentially renewable energy sources like solar panels.
Energy Secretary Ed Miliband highlighted that these improvements could save tenants an estimated £240 annually on energy bills, ensuring landlords contribute to making rental homes more sustainable. Many landlords have already responded proactively by upgrading their properties or focusing on acquiring more energy-efficient homes, such as new-builds, which tend to have higher EPC ratings.
Current EPC Landscape in the Private Rental Sector
Recent data shows encouraging progress, with nearly half (48%) of privately rented homes in England already achieving an EPC rating of C or above. However, for those still below the threshold, landlords must take proactive steps to avoid falling behind regulatory requirements and risking potential fines or loss of rental income.
Moreover, tenants are increasingly considering EPC ratings when choosing rental properties. Homes with lower ratings risk what some industry experts refer to as a ‘brown discount’—reduced rental value and lower tenant demand. As a result, landlords are recognising that improving energy efficiency isn’t just a legal obligation but a smart investment to retain tenants and maintain property value.
Government Consultation and Landlord Considerations
The government is currently seeking feedback from landlords and tenants on the proposed energy efficiency changes. Importantly, the proposals suggest a spending cap of £15,000 for necessary upgrades, with an affordability exemption that could lower this cap to £10,000 for landlords who meet certain criteria.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, has urged the government to balance ambitious energy targets with realistic implementation plans. He emphasised the need for sustained funding and support to ensure landlords can make the necessary improvements without undue financial strain.
Next Steps for Landlords
With the 2030 deadline approaching, landlords should begin assessing their portfolios and planning for necessary upgrades. Key steps include:
- Conducting an EPC assessment: Determine where each property currently stands and what improvements may be required.
- Exploring available funding and grants: The government may introduce further support schemes to assist with energy efficiency upgrades.
- Prioritising cost-effective improvements: Start with insulation and heating efficiency measures, which often yield the highest EPC score increases at a relatively low cost.
- Considering property acquisitions: For those expanding their portfolios, investing in new-builds or high-efficiency properties can be a strategic move to future-proof against further regulation.
As the government refines its plans, staying informed and taking early action will be key for landlords looking to remain compliant, competitive, and financially prepared for the evolving rental market landscape.
Adapted from Buy Association
