EPC C: The New Minimum Standard for Rental Properties
The UK government has set a target for all privately rented homes in England and Wales to achieve an Energy Performance Certificate (EPC) rating of Band C or above by 2030. This is a significant step up from the current minimum standard of Band E, introduced in 2018 under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The proposal forms part of the government's wider commitment to reduce carbon emissions and tackle fuel poverty, and it will have a profound impact on landlords, agents, and property managers.
The consultation on improving the energy performance of privately rented homes, which closed in January 2021, set out the government's preferred approach: a phased introduction, with all new tenancies requiring an EPC C from 2025 and all existing tenancies by 2028. More recent government statements have indicated a single deadline of 2030 for all rented properties. This article examines the current proposals, the likely costs, the exemptions available, and how you can plan your upgrades now to avoid a last-minute scramble.
What the Current Proposals Say
The government's consultation proposed a minimum EPC rating of Band C for privately rented homes in England and Wales. The original timeline suggested that landlords would need to comply for new tenancies from 2025 and for all tenancies by 2028. In the 2023 Autumn Statement, the government announced a delay to the implementation of new EPC requirements, pushing the deadline to 2030. This delay was intended to give landlords more time to make necessary improvements and to reduce the financial burden during a period of high inflation and rising mortgage costs.
Under the proposals, landlords will need to ensure their properties meet Band C before they can be let. Local authorities will carry out enforcement and can issue fines of up to £30,000 for non-compliance. The government has also indicated that it will consult on a new cost cap, which would limit the amount landlords are required to spend on energy efficiency improvements. The previous cap was £3,500, but this is expected to increase to £10,000 to reflect the higher costs associated with reaching Band C.
Expected Costs of Upgrading to EPC C
The cost of upgrading a property to EPC C varies widely depending on its current rating, age, construction type, and location. According to data from the English Housing Survey, the average cost to improve a Band D property to Band C is around £4,000, while a Band E property could cost upwards of £8,000. For properties with solid walls or those off the gas grid, costs can be significantly higher.
Common measures required to reach Band C include:
- Loft insulation: Typically costs between £300 and £500, and can be a quick win for improving energy efficiency.
- Cavity wall insulation: Costs around £500 to £1,000, but not all properties have suitable cavities.
- Solid wall insulation: Can cost £8,000 to £15,000, making it one of the most expensive measures.
- Double or triple glazing: Costs £4,000 to £10,000 depending on the size of the property.
- New boiler or heat pump: A new gas boiler costs £2,000 to £3,000, while an air source heat pump can cost £7,000 to £14,000 before grants.
- Solar panels: Costs around £5,000 to £8,000 for a typical 3kW system.
Landlords can access government grants such as the Boiler Upgrade Scheme, which offers £7,500 towards the cost of a heat pump, and the Energy Company Obligation (ECO4) scheme, which provides funding for low-income households. However, these grants are not available for all properties, and landlords should check eligibility criteria carefully.
Exemptions and Exemptions Register
The government has proposed a number of exemptions to the EPC C requirement. These include:
- Cost cap exemption: If the cost of reaching Band C exceeds the cost cap (expected to be £10,000), landlords can register an exemption for five years.
- Wall insulation exemption: If a property cannot be improved to Band C due to the cost or disruption of installing solid wall insulation, landlords can apply for an exemption.
- Listed building exemption: Listed buildings and properties in conservation areas may be exempt if improvements would unacceptably alter their character.
- Deemed exemption: If a landlord has made all the improvements recommended in a green deal report but the property still does not reach Band C, they can register a deemed exemption.
All exemptions must be registered on the Private Rented Sector Exemptions Register, which is maintained by the government. Landlords must provide evidence to support their exemption, such as a report from a qualified surveyor or energy assessor. Exemptions last for five years, after which landlords must try again to improve the property.
How Landlords Should Plan Upgrades Now
With the 2030 deadline looming, landlords should start planning their energy efficiency upgrades now. The first step is to check the current EPC rating of your property. If it is already Band C or above, you are ahead of the curve. If not, you need to understand what improvements are needed and how much they will cost.
Commission a new EPC assessment to get an up-to-date rating and a list of recommended measures. An energy assessor can also provide a cost estimate for each measure. You can then prioritise the most cost-effective improvements, such as loft insulation and cavity wall insulation, before moving on to more expensive measures like solid wall insulation or heat pumps.
Consider using property inventory software to track your property's energy performance and schedule maintenance. This can help you stay organised and ensure you meet the deadline. Speak to your local authority or a qualified energy assessor to understand any grants or funding available in your area.
If you are planning to sell or remortgage, be aware that lenders may increasingly consider EPC ratings when assessing affordability. Some lenders already offer green mortgages with preferential rates for energy-efficient properties, and this trend is likely to grow.
Impact on the Rental Market
The EPC C requirement will have a significant impact on the rental market. According to research by Savills, around 60% of privately rented homes in England and Wales currently have an EPC rating of D or below. This means that a large number of landlords will need to invest in energy efficiency improvements to comply with the new standards.
Some landlords may choose to sell their properties rather than invest in upgrades, which could reduce the supply of rental housing and push up rents. Others may pass on the cost of improvements to tenants through higher rents, although this may be limited by affordability constraints. The government has acknowledged these risks and has stated that it will monitor the impact of the policy on the rental market.
For tenants, the EPC C requirement should lead to warmer, healthier homes and lower energy bills. Fuel poverty is a significant issue in the UK, and improving the energy efficiency of rental properties is seen as a key way to address it. The government estimates that upgrading all rented homes to Band C could save tenants an average of £180 per year on their energy bills.
Practical Steps for Landlords
To prepare for the 2030 deadline, landlords should take the following steps:
- Check your EPC: Find out your property's current rating and the recommended improvements.
- Prioritise low-cost measures: Start with loft insulation, cavity wall insulation, and draught-proofing.
- Consider renewable heating: If your boiler is old, consider replacing it with a heat pump, especially if you can access a grant.
- Plan your budget: Spread the cost of improvements over several years to avoid a large upfront bill.
- Keep records: Maintain a record of all improvements and any exemptions registered.
- Stay informed: Follow updates from the government and industry bodies such as Propertymark and the NRLA.
Propertymark has been actively lobbying the government to ensure that the EPC C requirement is realistic and achievable for landlords. It has called for a clear roadmap, adequate funding, and a recognition of the challenges faced by older properties. Landlords should engage with their local Propertymark branch or the NRLA to stay up to date with the latest developments.
Get Ahead with the Right Tools
Managing energy efficiency upgrades across a property portfolio can be complex. Our property inventory CRM helps landlords and agents track EPC ratings, schedule improvements, and maintain compliance records. Book a demo today to see how our platform can simplify your EPC C preparations and keep you organised ahead of the 2030 deadline.