Changes to EPC Rating

The UK government is tightening energy efficiency rules, requiring all privately rented properties to achieve a minimum EPC C rating.

While the reforms aim to cut carbon emissions and improve housing standards, they’ve sparked major concern across the private rented sector (PRS). Currently, 52% of PRS homes sit below EPC C, meaning over half the market will need upgrades to remain compliant.

An Energy Performance Certificate (EPC) measures a property’s energy efficiency and provides recommendations for improvement. It includes:

• A rating (currently A–G)
• Estimated energy costs
• Recommended Improvements
• Potential savings after improvements

EPCs are legally required when renting out a property.

Under the current system, properties receive a single headline rating from A to G, based on the Standard Assessment Procedure (SAP). The score is largely driven by the estimated cost of heating, lighting, and hot water.

Current minimum standard for rentals: EPC E

Because SAP prioritises energy cost rather than carbon impact, landlords could previously improve scores by installing more efficient gas boilers, even if they weren’t low-carbon solutions.

The new system (expected from 2026) will be different. Instead of one overall score there will be four measures:

• Insulation (Fabric performance) – How well the building retains heat (insulation, walls, windows). This will be mandatory.
• Heating system performance – How efficient and low-carbon it is
• Smart readiness – Ability to use solar panels or smart technology.
• Energy cost – Shown as an estimated annual bill.

Landlords must first meet the fabric standard, then choose to focus on either heating performance or smart readiness to reach compliance.

The shift signals a move away from cost efficiency and towards carbon reduction and long-term sustainability.

Government data estimates the average upgrade cost per property at £6,864.

However:

• Only 19% of landlords are willing to spend more than £5,000.

This financial mismatch raises concerns that:

• Smaller landlords may exit the market
• Rental supply could shrink
• Portfolio consolidation may accelerate

For agents, the risk isn’t just compliance — it’s supply.

If landlords leave the market due to upgrade costs, agencies may face:

• Reduced stock
• Increased competition
• Revenue pressure

There’s also an increased risk of EPC-related scams, with rogue operators offering quick fixes that fail to deliver meaningful compliance improvements.

Agents must be prepared to recommend credible, cost-effective solutions.

1) Get a detailed EPC assessment

Many landlords don’t know their exact score.

A full assessment:

• Takes 30–40 minutes
• Identifies low-cost improvement opportunities
• Shows how close the property is to the next band

Some properties may only need a few points to move from D to C.

Tip: Ensure assessors can access lofts, boilers, and all insulation areas for accurate scoring.

2) Focus on low-cost, high-impact upgrades

While the new system rolls out in late 2026, incremental improvements remain sensible.

Examples:

• Upgrade roof insulation to 270mm → +10–15 points
• Install cavity wall insulation (£350–£500) → +5–10 points
• Add hot water cylinder insulation → +1.5–2 points
• Switch to LED lighting → +1–2 points

These smaller upgrades can shift a property into a higher band without major expenditure.

If a property is already EPC C, consider retaining the current certificate until closer to 2029.

3) Consider renewables strategically

Solar panels or other renewables can improve ratings, but they cost more.

They can:

• Future-proof the property
• Attract tenants
• Improve environmental credentials

4) Keep thorough documentation

Landlords must:

• Photograph completed works
• Retain invoices and receipts
• Keep evidence of total spend

Without documentation, spending may not count toward the cost cap.

Moving to EPC C is one of the biggest changes for landlords in years.

Although the deadline has been extended and there’s a cost cap, the upgrades will still be a challenge — especially for smaller landlords.

The smart approach:

• Improve insulation first
• Spread costs over time
• Plan early
• Avoid rushed decisions

Landlords who act now and make gradual improvements will find it much easier — and cheaper — to stay compliant.