Originally published: February 2025
The government is tightening energy efficiency regulations in the UK, requiring all privately rented properties to achieve a minimum Energy Performance Certificate (EPC) rating of C.
Although these changes aim to improve housing quality and reduce carbon emissions, they’ve raised significant concerns in the private rented sector (PRS).
52% of PRS properties are currently rated below C, meaning swathes of landlords need to make property upgrades to comply.
Previously, the government proposed a £15,000 cap for these upgrades. However, Goodlord data revealed that 45% of landlords would only be willing to spend up to £2,000 per property.
This chasm was a huge sticking point.
To address this, the government made a concession in its January 2026 Warm Homes Plan, reducing the cap to £10,000. The government also provisionally extended the deadline for compliance for all properties to October 2030, climbing down from the original 2028 rollout for new tenancies.
While these measures slightly sweeten the pill for landlords, the most important update is this:
We now have confirmation of what the key pillars of the new EPC rating system will be.
This means you can soon start to prepare to make adjustments to your own properties or advise your landlords on the upgrades to prioritise.
Find out what they are below👇
An Energy Performance Certificate (EPC) is a document that evaluates the energy efficiency of a property. EPCs also suggest areas of improvement in the property, outlining their cost and telling you how much you could save on your yearly energy bills once the changes are made.
To understand exactly what the government is changing, we need to look at how EPCs currently work.
EPCs provide a single headline rating from A to G, with E being the current minimum rating for all private rental properties. This rating is calculated using the Standard Assessment Procedure (SAP) methodology which is primarily based on the estimated cost of heating, lighting, and hot water in a property.
The EPC bands are:
As this system prioritises cost efficiency over energy efficiency and greener solutions, a landlord could fit a new gas boiler to increase their score.
The government has now confirmed that reformed EPCs will present four headline performance metrics, rather than a single overall score. These include:
The fabric performance standard will be non-negotiable and prioritises insulation and windows. Once fabric is up to scratch, landlords will choose between the heating system metric or the smart readiness metric.
In the case of the former, a landlord could install a heat pump. In the case of the the latter, a landlord could invest in solar panels.
The idea behind this is to shift the focus from cost to energy efficiency while also incentivising low-carbon solutions.
Despite the good intentions of these reforms, many in the Private Rented Sector (PRS) have expressed concerns. According to Goodlord's polling, 46% of landlords and 34% of agents believe that raising minimum energy efficiency standards will negatively affect the rental market. Here are some of the reasons behind that sentiment...
The financial burden of meeting the new EPC standards is substantial, with private rented dwellings needing an average of £6,864-worth of investment to comply, according to government data.
However, our data revealed that only 19% of landlords would be willing to pay more than £5,000 on upgrades.
This mismatch raises serious questions. If landlords are unwilling or unable to invest in the necessary upgrades, those with more modest portfolios may leave the market, unless they receive proper help to comply. At a Goodlord event, Suzanne Smith, Founder of The Independent Landlord, said:
"Many smaller landlords want to do the right thing, but the pace of change is overwhelming. Without proper communication and realistic timelines, they’ll either struggle to comply or decide it’s just not worth it anymore."
Letting agents are rightly concerned about stricter EPC regulations. If the increased compliance burden pushes landlords and properties that can't make the "C" grade out of the market, it’ll hurt your bottom line. You'll also face increased competition.
Another important consideration for letting agents is the increased risk of scams. Bad actors looking to exploit these regulatory changes could offer quick fixes to your landlords that have a negative impact on their chances of compliance.
Because of this, it's important that you can recommend well-researched, effective upgrades that actually move the needle, and provide any other support your clients need.
The new EPC regulations will improve property quality, but they may also lead to increased rents as landlords recover upgrade costs. While tenants prefer energy-efficient homes and may be willing to pay a premium for these benefits, the question remains:
Just how much more are they willing to pay?
For instance, upgrading a property to save £300 annually in energy bills might require upfront investments of £8,000. To recover the expenses, landlords could raise rents by around £70 per month.
With nearly half of tenants already spending more than 40% of their income on rent, this could push even more into rent poverty.
So far, we've covered the proposed changes and their potential impacts. Now, let’s see how you can improve EPC ratings without investing huge lump sums.
The first step to improving an EPC rating is to conduct a thorough assessment. A recent survey conducted by epIMS reveals that 95% of landlords are unaware of the EPC rating of their property.
Landlords need to understand their exact point score, not just the overall grade. This is because many properties may only be a few points off from higher ratings and may not require heavy investment.
Typically, this assessment takes around 30 to 40 minutes and provides a detailed report on the current energy efficiency of the property. It'll show what needs to be fixed and give a clear start for any needed improvements.
To get the most accurate assessment possible, advise your landlords to make all parts of the property accessible to assessors, including the roof and other hard-to-reach places.
As changes to the EPC metrics rating system are being introduced in the latter half of 2026, landlords are best served focusing on small improvements until there's total clarity.
However, it's fair to assume that low-carbon, energy-efficient solutions are a solid investment.
There are also lots of affordable upgrades that can make a high impact on your ratings. For instance:
These low-cost changes can easily push landlords’ properties from one rating band to another without spending a lot. Plus, improvements made from October 2025 will count towards the 2030 cap, meaning they can spread costs over a longer period of time.
If your landlord's property is already at EPC C, keep your existing certificate and renew it closer to 2029.
Incorporating renewable energy sources can improve EPC ratings while also reducing the property’s carbon footprint over time.
A 16-panel solar system, for example, can add an average of 10 points to the EPC score, while a large wind turbine can contribute 7 points.
While these upgrades may involve a larger initial investment, they can help future-proof the property and make a substantial difference in meeting EPC requirements.
Ensure that landlords always take photos and keep receipts to prove how much they've spent on property upgrades. Anything unrecorded may not be acknowledged later.
To help landlords comply with future EPC standards, the government has set out a mix of grants, loans, and wider financial support. The extent to which this moves the needle on landlords' ability to comply with EPC C remains to be seen.
Alongside targeted grant schemes, the government has committed £5 billion to a Warm Homes Fund to support home energy upgrades more broadly.
Unlike individual grant programmes, the Warm Homes Fund is not a grant that landlords apply for directly. Instead, it's designed to underpin loans and other funding mechanisms, helping households and landlords spread the cost of energy efficiency improvements over time rather than paying everything upfront.
The Fund supports a more flexible approach to funding EPC upgrades, combining:
For landlords who choose to self-fund improvements, the government has also confirmed that investment in qualifying energy efficiency upgrades can be treated as an allowable expense and may be tax deductible, helping offset some of the upfront cost.
Part of the Warm Homes funding framework includes the Warm Homes: Local Grant, which is designed to help private landlords fund EPC upgrades in specific circumstances. This grant began delivery in 2025 and is available to English private landlords who have tenants on low incomes or properties rated EPC D to G.
Grants like this, alongside other schemes such as the Energy Company Obligation (ECO) and the Great British Insulation Scheme, can significantly ease the financial burden of energy efficiency improvements. Depending on the programme and eligibility criteria, landlords may qualify for funding that covers up to £15,000.
Eligible energy-saving improvements can include:
However, to qualify for these grants, properties must meet specific conditions:
A limited amount of funding is available to local authorities, and only certain areas in England will receive funding through this grant.
Like many of our peers, Goodlord has called for the government to provide more clarity on proposed EPC reforms. That's why the steps taken in January 2026 must be praised.
The next step is to ensure that the support offered to landlords to help them comply has teeth and keeps them in the sector.
Because unless housebuilding ramps up significantly, the overdependence on the PRS will last for a long while yet.
Goodlord is here to help. Our platform helps agents manage their landlords' EPC compliance by:
Hit the banner below to learn more 👇
This article is intended as a guide only and does not constitute legal advice. Visit gov.uk for more information.