How to dodge the £15,000 landlord invoice bombshell: Rules are altering… that is what each home-owner MUST know and what to do about it

Millions of landlords could face eye-watering bills worth up to £15,000 per property to comply with new energy efficiency standards announced today.

Energy Secretary Ed Miliband says all privately rented properties must have an Energy Performance Certificate (EPC) rating of C by 2030, up from the current minimum of E.

EPC ratings range from A, the most efficient, to G, the least. Typically, newer and better-insulated homes have a better rating than older, draughtier ones.

Around half of rental properties, equal to roughly 2.6million homes, are currently below the C rating. The average cost to landlords needing to make upgrades is £6,000 per property, the Government estimates, although others say the actual cost is likely to be higher.

The Government is launching a 12-week consultation on the measure, which would be introduced in England and Wales. It says the move would raise living standards for tenants and save them up to £240 a year.

‘This is a basic issue of fairness. You pay your rent – why shouldn’t you be able to live in a decent, warm home?’ Ed Miliband told BBC Breakfast this morning. ‘We think this is the right thing to do for millions of tenants who are living in cold draughty homes. I think landlords are going to have to foot at least some significant part of this bill. And we think that’s fair and right to ask landlords to do that.’

Landlord groups say the cost will be passed on to tenants, meaning higher rents at a time when rents have already spiralled due to a shortage of homes and higher mortgage interest rates.

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), said getting 2.6million homes to the required standard by 2030 is unachievable because the cost is too high and there is a shortage of tradespeople to carry out the work.

‘The government wants rented homes to meet an EPC C for new tenancies by 2028 and for all other tenancies by 2030. Given that this is a consultation, and the rules are not expected to be confirmed until late 2026, this is simply not enough time to retrofit an estimated 2.6million homes,’ he says. ‘For tenants, this could result in higher rents and fewer homes to choose from, as supply decreases due to landlords exiting the market.’

How EPC ratings work

An Energy Performance Certificate gives an energy efficiency rating for a property in the UK. It is a legally required document when a property is built, sold or rented.

The EPC gives potential buyers or tenants an indication of a home’s energy efficiency and suggests where improvements could be made.

Properties are rated on a scale of A to G, with A being the most efficient and G being the least efficient.

Currently, rental properties must have a minimum EPC rating of E – even for existing tenants that have been in the property a long time. The government now wants to raise the minimum required rating to C for new tenancies by 2028, and to all tenancies by 2030.

The proportion of private rented sector homes with an EPC rating of A to C is 48 per cent according to the latest English Housing Survey. This means more than half of rental homes would need to be upgraded.

In a poll of 300 landlords in 2024 by lettings technology platforms Goodlord and Vouch, more than half said new energy efficiency rules would be the key reason for selling up over the next year.

The average amount landlords said they are willing to spend per property is £2,400, far below the government’s estimated cost of £6,000 per property.

How to improve an EPC rating

Changes that could make a home more energy efficient include adding loft or cavity wall insulation, installing double glazing, upgrading the boiler and replacing it with a heat pump or biomass boiler, putting solar panels on the roof and sealing gaps to reduce draughts.

The average cost of adding loft insulation to an E to F rated property is around £800 to £900, and cavity wall insulation would cost around £2,700, according to figures from Ovo Energy. Adding 10 solar panels would cost around £6,200 and an air source heat pump would cost £5,000 including a government grant.

The cost of double glazing can be anything from £500 to £3,000 per window, says Maximilian Schwerdtfeger at information website The Eco Experts.

The cost of having an EPC assessment done is £35 to £120. You can check a property’s EPC at www.gov.uk/find-energy-certificate. This covers properties in England, Wales or Northern Ireland. For Scotland, there is the Scottish Energy Performance Certificate Register at www.scottishepcregister.org.uk.

Daryl Norkett, director of real estate proposition at Shawbrook bank, says much of the UK’s housing stock was built before the 1950s and would need significant renovations to bring a property up to the C standard. He believes the average cost per landlord could be almost £10,500 – higher than the government’s expectations.

‘The cost of most improvements, for example heating upgrades, do not vary as much across the country as the value of the properties themselves and it is more challenging to make a business case to invest £10,000 into a property worth £100,000 in the North East than it is a property worth £500,000 in the South East,’ says Norkett.

Under the plans set out in the consultation, landlords will not have to spend more than £15,000 upgrading homes. There is the potential for a lower cap of £10,000 if tenants are charged lower rents or the property is in a lower council tax band.

Financial help with the cost of improving an EPC rating

There are measures in place to support landlords with the financial implications of upgrading a home’s EPC rating.

The Warm Homes: Local Grant is available to English private landlords who meet certain requirements, such as having tenants on low incomes. The grant has not yet opened but is scheduled to launch in April. Landlords can receive one home fully funded, and with a 50 per cent cost contribution towards any additional properties upgraded after the first.

The Great British Insulation Scheme allows homeowners, landlords and tenants in properties with an EPC rating of D to G to get free or cheaper insulation to reduce energy bills. This could include cavity wall insulation, solid wall insulation, loft insulation, flat or pitched roof insulation and flooring insulation. Go to: https://www.gov.uk/apply-great-british-insulation-scheme.

The Boiler Upgrade Scheme allows homeowners and landlords in England and Wales to get a grant to cover part of the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler. Current grants include £7,500 towards an air source heat pump or a ground source heat pump, and £5,000 towards a biomass boiler. However, most new-build or social housing properties are not eligible. Go to: https://www.gov.uk/apply-boiler-upgrade-scheme.

How will the government know if landlords are compliant?

The minimum energy efficiency standard regulations are enforced by the government’s Local Weights and Measures Authorities, which checks and ensure compliance. If the enforcement authority believes a landlord has failed to fulfil their obligations under the regulations, they can serve the landlord with a compliance notice. If a breach is confirmed, the landlord may receive a financial penalty.

A compliance notice may request information on the EPC during the time that the property was let, and on any energy efficiency improvements made.

What happens if landlords don’t comply?

The consultation proposes a maximum fine of £30,000 in relation to a breach at a single property.

Rents could be pushed up

There has been a lot of uncertainty and moving timelines associated with EPC rules, according to Oli Sherlock, managing director at Goodlord. He says: ‘This has clearly fostered opposition amongst landlords, many of whom are deciding that the current environment – heavy with regulatory burdens – simply isn’t worth staying invested in. The rental market is extremely fragile right now and the market simply can’t afford for this volume of landlords to sell out.’

Landlord groups say it’s inevitable landlords will pass on costs to tenants by increasing rents.

Around 38 per cent of landlords own between two and four rental properties, with 45 per cent owning a single buy-to-let property, according to the English Private Landlord Survey of 2024. The majority are not ‘career landlords’, and are already struggling to make their venture profitable after high interest rates and taxes.

They will therefore have no choice but to aim to increase rents to cover the costs of upgrading a property – or they will simply sell up, says Chris Norris, campaigns director at the NRLA.

‘A landlord spending the lower end of the government’s estimated retrofit cost to achieve EPC C might be able to spread the £6,000 cost over a ten-year period and may only pass on 50 per cent in the form of increased rents, but this will still equate to around £25 per month or £300 per year in additional rent for a typical household,’ he adds.

Timothy Douglas, head of policy and campaigns at estate agent industry group Propertymark, says more landlords are likely to sell up and tenants will have fewer rental properties available. ‘Letting agents and their landlords want to see more energy efficient homes, but the targets and costs must be realistic and achievable,’ he says.