Energy efficiency is becoming one of the biggest long-term compliance and investment issues facing residential landlords.
The government has confirmed its intention that privately rented homes in England and Wales should reach EPC C by 2030, but landlords need to distinguish carefully between what has been announced as policy and what is already legally enforceable.
That distinction matters.
The direction of travel is clear, but not every part of the future regime is yet in force.
What is the current minimum standard?
At present, most privately rented properties in England and Wales must generally achieve at least EPC E, unless a valid exemption applies.
That remains the current legal minimum.
Landlords should therefore avoid describing EPC C as though it is already the statutory minimum today.
However, waiting until the law changes before planning improvements could prove expensive.
What has the government confirmed?
The government has confirmed its intention to raise minimum energy-efficiency standards in the private rented sector.
The objective is for rented homes to meet an EPC C-equivalent standard by 2030.
The future system is also expected to place greater emphasis on the actual energy performance of the property rather than relying entirely on the existing EPC measurement approach.
For landlords, this means the current EPC rating should be treated as the starting point for planning rather than necessarily the final measure that will determine future compliance.
A £10,000 investment cap is part of the proposed framework
The government has indicated that landlords would generally be expected to invest up to a maximum of £10,000 per property towards required energy-efficiency improvements before certain exemptions may become available.
That figure is important for portfolio landlords.
Ten properties potentially needing substantial improvement represent a very different financial challenge from one property requiring modest work.
Landlords should therefore start assessing costs property by property rather than thinking about EPC compliance only at portfolio level.
What still requires legislation?
The key point is that the future EPC C regime still requires detailed legislation and implementation arrangements.
Landlords should therefore be cautious about assuming that every proposal, technical measure or exemption discussed by government is already final.
Important details can still affect:
- how properties are assessed;
- which improvements count;
- how expenditure is calculated;
- exemptions;
- enforcement;
- evidence requirements; and
- transitional arrangements.
NetRent will continue to follow those developments through Landlord Legal Updates.
Which properties should landlords look at first?
A sensible portfolio review should start with properties currently rated D or E.
For each property, consider:
- the current EPC rating;
- when the EPC expires;
- recommended improvements;
- estimated improvement costs;
- insulation;
- windows;
- heating systems;
- hot-water systems;
- ventilation; and
- whether major refurbishment is already planned.
It may make financial sense to combine energy-efficiency work with other refurbishment rather than disturb the property twice.
Do not rely blindly on the EPC recommendations
The recommendations on an existing EPC can be useful, but landlords should avoid treating them as a complete investment plan.
The certificate may have been produced several years ago.
Costs may have changed, technology may have improved and the property itself may have been altered.
Before spending significant sums, landlords may want a more detailed assessment of the building and the measures most likely to improve performance.
Think about the tenancy timetable
Energy improvements can be easier to carry out between tenancies.
That means landlords should consider future compliance when planning:
- tenant changeovers;
- refurbishments;
- remortgages;
- major repairs; and
- property sales.
A landlord who expects a property to become vacant in 2027 or 2028 may have a valuable opportunity to complete work before the 2030 target date approaches.
Financing the improvements
For some landlords, the biggest issue will not be identifying improvements but funding them.
Larger works may influence decisions about:
- refinancing;
- further investment;
- retention of individual properties;
- portfolio restructuring; or
- selling properties where the economics no longer work.
This is where legal compliance begins to overlap with wider investment strategy.
NetRent can assist landlords considering buy-to-let mortgages and refinancing, while our Property for Sale service provides another option for landlords deciding to dispose of rental property.
What about Wales?
The 2030 policy direction applies across England and Wales, but the wider landlord regulatory systems remain different.
Welsh landlords continue to operate under the Renting Homes framework and Rent Smart Wales requirements.
Landlords should therefore separate future energy-efficiency obligations from the different tenancy and licensing systems operating in each nation.
Scotland and Northern Ireland have their own energy-efficiency policies and landlord frameworks.
Start planning, but do not confuse policy with current law
The most sensible approach is neither to ignore EPC C until 2030 nor to panic and assume every proposal is already mandatory.
Instead:
- identify lower-rated properties;
- estimate likely improvement costs;
- prioritise cost-effective work;
- coordinate improvements with refurbishment and refinancing; and
- watch carefully as the detailed regulations are introduced.
The direction is clear. The remaining detail will determine exactly what individual landlords must do.
NetRent’s Landlord Legal Updates will continue to track those changes as they develop.
NetRent also supports landlords with landlord insurance, mortgages and property sales.
Telephone: 01352 721300
Email: support@netrent.co.uk
Important information
NetRent does not provide legal advice. The articles represent our understanding of rental property law and are for general information only.