Minimum standards

An Energy Performance Certificate (EPC) rates the energy efficiency of a property on a scale from A (most efficient) to G (least efficient). In 2018, the government introduced the Minimum Energy Efficiency Standards (MEES), making it unlawful to rent properties with an EPC rating below E for new tenancies.

By 2030, it is now being suggested all rental properties in England and must have an EPC rating of at least C.

A consultation is expected later this year, and it is anticipated to include a cap on the amount landlords will have to spend on upgrades. This was set at £10,000 under previous plans and Ed Miliband our new energy secretary is expected to stick with a similar figure. Miliband has said that his department are still considering support and incentives for private landlords. For example, private rented sector landlords may receive one home fully funded per landlord under Warm Homes: Local Grant. And a 50% contribution from the local authority for the 2nd home.

There are about 2.9m privately rented homes which are thought to have energy efficiency ratings below grade C.

Until we know the exact grants, the exact timing and how the new EPC will be worked out it is very difficult to advise what you need to do to stay ahead of the situation. So we have reviewed what presumably is on the table now and give you an idea for access.

So what might landlords need to do by 2030?

1. Upgrade property to EPC band C

Suggestion is that landlords will need to ensure their properties meet an EPC rating of C or above by 2030. This will involve making energy efficiency improvements such as:

• Insulation upgrades: adding or improving loft, wall, and floor insulation.
• Efficient heating systems: replacing old boilers with more efficient models, such as condensing boilers or heat pumps.
• Double or triple glazing: upgrading windows to reduce heat loss.
• Renewable energy installations: installing solar panels or heat recovery systems.
• Smart energy management: implementing smart thermostats and controls to optimise energy use.

2. Budget for energy efficiency upgrades

The cost of bringing a property up to EPC standard C will vary depending on its current rating and the improvements needed. On average, the estimated cost to upgrade a property from an E to a C rating can range from £5,000 to £10,000, though this depends on the building type and size. Therefore it is a good idea landlords to take advantage of available grants and incentives to help offset the cost whilst they are on the table.

Grants and funding available for landlords

Upgrading rental properties to meet EPC requirements can be costly, but there are several grants and funding schemes available to help landlords with the expense:

1. Energy company obligation (ECO4)
   The Energy Company Obligation (ECO4) is a government energy efficiency scheme aimed at reducing carbon emissions. It requires energy suppliers to help households reduce energy use. Under this scheme, landlords can apply for funding to improve insulation, heating systems, and glazing in properties that house low-income tenants.To be eligible, properties typically need to house tenants on certain benefits or low incomes. However, it’s worth exploring as the scheme can substantially reduce the cost of energy efficiency upgrades.
2. Local authority grants
   Many local councils provide grants or low-interest loans for property upgrades aimed at energy efficiency. These vary by region and can support measures like wall and roof insulation, energy-efficient windows, and even renewable energy installations like solar panels.
3. VAT reductions on energy efficiency measures
   Some energy efficiency upgrades, such as installing insulation or certain heating systems, are eligible for a VAT reduction. Typically, the VAT rate on these improvements is reduced to 5% (instead of the standard 20%). This reduction can make a significant difference in the overall cost of improving energy efficiency.
4. Landlord loans for energy efficiency
   Several financial institutions now offer landlord loans designed specifically for energy efficiency upgrades. These loans often come with low-interest rates and flexible repayment terms to help property owners manage the cost of meeting EPC requirements.
5. Warm Homes: Local Grant
   Landlords who have low-income tenants that meet the household eligibility can access grant funding. The Warm Homes: Local Grant will fully fund upgrades for one property per landlord – any subsequent properties (the second to be upgraded and beyond) owned by the same landlord will require a 50% landlord cost contribution towards the total cost of works.
6. Boiler Upgrade Scheme and the Great British Insulation Scheme
   These deliver funding via installers, energy companies, and other providers.

Planning for the future: steps for landlords

1. Review your EPC assessment: this will give you the element needed to be improved to meet the 2030 standards.
2. Research grants and funding: take full advantage of available grants, loans, and VAT reductions to help reduce the cost of upgrades.
3. Schedule upgrades: plan your property improvements over time rather than waiting until the 2030 deadline approaches. Staggering the work will ease financial and operational pressure.
4. Stay informed: EPC regulations are likely to continue evolving as the UK works towards its net-zero goals. Staying informed of future changes will allow you to plan ahead and avoid penalties.

Need help upgrading your property?

If you’re a landlord looking for guidance on how to meet EPC regulations or find funding options, get in touch with energy experts or check your local council’s website for updates on available support schemes.