New EPC rules for landlords could lead to higher rents and fewer homes

8 February 2025, 01:18 | Updated: 8 February 2025, 08:34

The Government’s proposals to require all privately rented homes to meet at least an EPC C by 2030 don’t come as a surprise.

Unlike social landlords, or owner occupiers, private landlords have had to meet minimum energy efficiency standards since 2018 and have been repeatedly promised, or perhaps threatened, with a tightening of those requirements by successive governments.

Landlords have invested billions of pounds in energy efficiency measures over the last decade to ensure compliance with energy efficiency standards but this spending may pale into insignificance compared with the cost of getting all rented homes to EPC C.

It is likely to cost £15-20 billion to retrofit the 2.6 million rented homes estimated to not meet the proposed standard.

Rather than thinking of this in billions though, consider a typical rented home which may require £6,000 of work. Perhaps some internal insulation and upgraded double glazing.

If a landlord invests to meet EPC C and spreads the costs over a ten-year period, that represents a cost of £600 per year. As a business they will need to recoup at least some of their costs through income.

If they pass on 50% of their costs to their tenants, this will mean an increase of £25 per month or £300 per year.

Given that the Government suggests that households may enjoy up to £240 per year savings against their utility bills, I’m not convinced many will consider this a good deal.

However, the real concern presented by these new proposals is not actually the commitment to improve the energy efficiency of homes.

There are too many inefficient homes in the UK. Many of these are privately rented, although far from all, and EPC C may be the correct ambition.

The scandal of these proposals is that, after years of waiting for clarity, private landlords will in effect be given less than three years to carry out more than two million retrofits.

According to the Government’s own consultation, standards and regulations will not be confirmed until late 2026 after which landlords will be expected to ensure any property hosting a new tenancy hits EPC C by 2028, with all other rentals following shortly behind in 2030.

In essence that means that for roughly three and a half years, we have to retrofit almost 3,000 homes every working day.

Landlords want to provide good quality homes.

They want to contribute to improving stock.

But there is absolutely no way that high quality work can be carried out at that pace, and at that volume.

There simply are not the tradespeople, the supply chain, or the available capital.

Properties will no doubt be sold. Rents will rise. Who will benefit?

It would be laughable, if it were not so serious.

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Chris Norris is the campaigns and policy director at the National Residential Landlords Association.

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