Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Experts Say Landlords Overstate EPC Upgrade Costs by £6,000

Landlords believe it will cost them, on average, more than £11,000 to upgrade their properties to an Energy Performance Certificate (EPC) rating of C. However, energy efficiency experts say these fears are overstated, with actual costs often much lower.

A survey by Pegasus Insight found that 60% of landlords own at least one property rated below EPC C. Nearly two-thirds of these landlords said they plan to carry out the necessary improvements, an increase of 13% compared to the previous quarter.

Landlords estimated the average bill to bring a property up to EPC C at £11,713, with plans to use savings, finance, or government grants to fund the work. However, Eco Approach, a provider of EPCs and energy-efficiency advice, analysed over 200,000 properties and found the average cost to achieve a C rating was £5,500, with a third of properties costing less than £1,500 to upgrade.

The Mortgage Works (TMW) also estimated that a third of its landlords could reach a C rating by spending £1,500 or less. According to Eco Approach, some costs, such as wall insulation, are now optional under the new Minimum Energy Efficiency Standard (MEES), which becomes mandatory from October 2030.

The government has set a cap for the maximum spend on a property’s energy-efficiency upgrades at £10,000, or 10% of the property value if it is below £100,000. This means no landlord will be required to spend more than £10,000 on upgrades.

Currently, EPC ratings are based on the cost of energy bills, and small improvements like switching to LED lights, topping up loft insulation, draught-proofing, and installing better heating controls can be enough to move a property from a D to a C rating. From October 2029, the methodology will change to the Home Energy Model (HEM), which uses four metrics to measure energy efficiency. Under HEM, landlords may need to install a heat pump or solar panels, in addition to improving insulation, to achieve a C rating. Certificates issued under the current system will remain valid for 10 years, even after the new methodology is introduced.