Energy efficiency standards in the private rented sector are set to change over the coming years. For landlords, understanding the proposed EPC changes now can help avoid potential compliance issues and significant financial penalties further down the line.
This guide outlines the current requirements, the planned changes for 2030, and the practical steps landlords can take to prepare.
What is an EPC?
An Energy Performance Certificate (EPC) measures a property’s energy efficiency and assigns it a rating from A to G, with A representing the highest level of efficiency and G the lowest. EPCs remain valid for ten years and are required when a property is built, sold, or let.
Landlords must provide tenants with a valid EPC, and properties being advertised for rent must display their EPC rating in the listing.
Generally, newer homes tend to achieve higher ratings because they are built to more modern energy-efficiency standards, while many older properties require improvements to achieve the same level of performance.
Current EPC requirements for rental properties
At present, privately rented properties in England and Wales must achieve a minimum EPC rating of E unless a valid exemption has been registered.
Landlords who let properties below this standard without an exemption may face enforcement action and financial penalties. Current fines can reach up to £5,000 for non-compliance.
Current improvement cost limits
Under the existing regulations, landlords are generally expected to invest up to £3,500 (including VAT) on eligible energy-efficiency improvements where required.
If improvements costing up to this amount have been carried out and the property still does not achieve the required EPC rating, landlords may be able to register an exemption.
Properties that do not require an EPC
Certain building types are currently exempt from EPC requirements. Examples include:
- Temporary buildings intended for use for less than two years.
- Stand-alone buildings with less than 50 square metres of usable floor space.
- Industrial buildings and workshops.
- Certain properties scheduled for demolition.
- Some holiday accommodation and short-term occupancy buildings.
- Places of worship.
Landlords should always confirm whether an exemption applies before assuming an EPC is not required.
Existing EPC exemptions
The regulations recognise that not every property can be upgraded to meet minimum standards. Current exemptions include:
All relevant improvements completed
If qualifying improvements have been completed up to the current spending cap and the property still falls below the required rating, an exemption may be registered for five years.
High-cost improvements
Where the cheapest improvement exceeds the current spending cap, landlords may qualify for an exemption. Evidence from qualified installers is typically required to demonstrate the projected costs.
Wall insulation exemption
Some properties may be unsuitable for cavity wall, internal wall, or external wall insulation where the work could negatively affect the building’s structure or condition. Independent professional evidence is required to support this exemption.
Third-party consent
Certain improvements may require permission from another party, such as a freeholder, tenant, or superior landlord. Where consent cannot be obtained, an exemption may be available.
Property devaluation
If energy-efficiency improvements would reduce the property’s value by more than 5%, landlords may apply for an exemption. This should be evidenced by an independent valuation from a RICS surveyor.
Recently became a landlord
In certain circumstances, landlords who have recently acquired a property may be eligible for a temporary exemption lasting six months.
What changes are coming in 2030?
The most significant proposed change is that from 1 October 2030, privately rented homes in England and Wales will generally be expected to achieve a minimum EPC rating of C, rather than the current E standard.
The same deadline will apply to both new and existing tenancies. Landlords who fail to meet the new requirements could face penalties of up to £30,000.
For many landlords, especially those with older housing stock, this may require substantial investment and advance planning.
A new method of measuring energy efficiency
Alongside the move to EPC C, the government plans to replace the current Standard Assessment Procedure (SAP) with a new framework known as the Home Energy Model (HEM).
The new system is intended to provide a more accurate view of a property’s real-world energy performance and will assess four key areas:
- Fabric performance – how effectively the building retains heat through its walls, roof, windows and overall construction.
- Heating efficiency – the effectiveness of the property’s heating system and its environmental impact.
- Smart technology readiness – the extent to which the property can support modern energy-management technology, such as smart controls, solar panels and other energy-saving systems.
- Running costs – estimated energy costs associated with occupying and operating the property.
The HEM framework is expected to begin being introduced during 2027 and become fully established before the 2030 compliance deadline.
Higher spending limits for landlords
The proposed changes will also increase the amount landlords are expected to invest before they can claim certain exemptions.
From October 2030, the improvement cost cap is expected to rise from £3,500 to £10,000.
However, there are two important points to note:
- Eligible energy-efficiency improvements carried out from 1 October 2025 onwards count towards the new £10,000 limit.
- Lower-value properties may be subject to a reduced cap based on 10% of the property’s value, known as the “property value adjustment”.
Future EPC exemptions
Most of the current exemption categories are expected to remain in place under the new framework.
Additional provisions are expected to include:
- The property value adjustment exemption
- A specific exemption relating to solid wall insulation where installation could cause issues such as damp or structural concerns
What about holiday lets?
Currently, short-term holiday accommodation remains outside the scope of the proposed 2030 minimum EPC C requirement. However, the government has indicated that this area may be reviewed in the future.
Do listed buildings need an EPC?
A common misconception is that listed buildings are automatically exempt from EPC requirements. In reality, landlords will usually still need to obtain an EPC.
While certain listed buildings may qualify for exemptions from minimum energy-efficiency standards where improvements would be inappropriate or harmful, landlords should not assume a blanket exemption applies.
Property owners should still investigate reasonable efficiency improvements and register any applicable exemption where necessary.
Practical ways to improve an EPC rating
Landlords concerned about meeting future standards may wish to begin reviewing their properties now. Common improvements include:
- Replacing traditional lighting with energy-efficient LED bulbs
- Draft-proofing doors and windows
- Installing or upgrading loft insulation
- Upgrading to double or triple-glazed windows
- Replacing older heating systems with more efficient boilers
The most appropriate measures will vary depending on the property’s age, construction type, and condition.
Key dates for landlords
1 October 2025
Eligible energy-efficiency improvement costs begin counting towards the proposed £10,000 cap.
Late 2027
The new Home Energy Model is expected to begin being introduced alongside the existing EPC assessment framework.
1 October 2029
Existing EPC C ratings achieved under the current SAP methodology before this date will remain valid until the certificate expires.
1 October 2030
New minimum EPC C standards are expected to apply to private rented properties in England and Wales, subject to any valid exemption. Enforcement of the updated rules is also expected to begin from this date.
What landlords should do now
Although the 2030 deadline may seem distant, landlords with lower-rated properties should start planning early. Obtaining an up-to-date EPC, identifying likely improvement requirements, and budgeting for future works can help spread costs over several years rather than facing substantial expenditure closer to the deadline.
This article is intended as a guide only. Please note that legislation does change, it is always best to check the most up to date guidance on gov.uk. Most landlord insurance policies arranged by Alan Boswell Group also have access to a legal advice helpline where policyholders can seek further advice.
