Buy-to-Let Watch: Getting Ahead of New EPC Rules – Copy
Buy-to-Let Watch
Energy Performance Certificate (EPC) reform continues to dominate conversations with landlords, and with good reason. While earlier proposals were paused, the issue has firmly returned to the agenda following a renewed consultation setting out revised timelines.
Under the latest proposals, privately rented homes will be required to achieve an EPC rating of C or above for new tenancies from 1 April 2028, and for all tenancies from 1 April 2030.
A proposed spending cap of £15,000 per property remains in place, with the possibility of a lower cap for less affordable homes. While final details are still subject to consultation, it is clear that EPC compliance is no longer a distant consideration for landlords.
Certainty remains limited, timelines do not
Despite the renewed direction of travel, uncertainty persists. Some landlords may choose to delay spending until EPC and Minimum Energy Efficiency Standards (MEES) reforms are fully confirmed. However, this approach risks leaving a narrow window between regulatory confirmation, expected in 2026, and the 2028 compliance deadline.
Waiting for full clarity may appear sensible, but it could also increase exposure to higher costs and limited contractor availability once demand accelerates.
Costs add up quickly for portfolios
The headline £15,000 cap can appear manageable in isolation. For landlords with larger portfolios, however, the figures quickly escalate when multiplied across 10, 20 or more properties.
Many portfolio landlords are unlikely to fund upgrades solely from savings and may need to consider additional borrowing to cover the work. This raises important planning questions around affordability, loan structure, and long-term portfolio strategy.
Finance options are evolving
Lenders are already responding to the shift towards higher energy efficiency standards. Properties rated EPC A to C are increasingly being rewarded with higher loan-to-value limits, lower interest rates, or product incentives.
Green further advances, cashback options linked to renovation, and preferential product transfers are becoming more common. These offerings are expected to expand once the regulatory framework is finalised, making early awareness an advantage for landlords and advisers alike.
Grants can help stretch budgets
Grant funding remains an important consideration. While availability is limited and eligibility criteria apply, some schemes continue to offer meaningful support for insulation and heating improvements, particularly where tenants meet income thresholds.
Advisers can add value by ensuring landlords understand what support remains available and how it can be combined with borrowing to reduce overall upgrade costs.
New funding models under consideration
In parallel, policymakers are exploring alternative funding structures, including property-linked finance, where loan repayment is tied to the property rather than the individual borrower. Such models could potentially reduce lender risk and borrowing costs, although proposals remain at consultation stage.
This area is worth monitoring closely, as it could reshape how energy efficiency upgrades are funded over the longer term.
Quick wins: start with the EPC
A practical first step is ensuring landlords understand the current position of their properties. Many still rely on out dated EPCs that do not reflect improvements made over recent years.
A fresh EPC assessment may reveal that a property is closer to a C rating than expected. EPC reports also provide recommended measures, helping landlords prioritise works that deliver the greatest impact for the lowest cost.
Strategic decisions: improve, replace, or exit
Not all landlords will choose to upgrade. Some may decide that the cost and complexity outweigh the benefits and opt to exit the sector. Others are selling lower-rated stock and reinvesting in properties that already meet, or are closer to meeting, the proposed standards.
More long-term investors are taking a different view, prepared to invest upfront in energy efficiency in exchange for stronger rental demand, improved asset value, and better mortgage terms over time.
Advisers who can explain both the retrofit pathway and the acquisition opportunity are well placed to support informed decision-making.
Penalties raise the stakes
Current estimates suggest that millions of privately rented homes still fall within EPC bands D to G. Proposed penalties for non-compliance could reach £30,000 per property, per breach, once higher standards are introduced.
Importantly, it is proposed that only qualifying works completed after the regulations come into force will count towards the spending cap. While this may encourage landlords to wait, it also increases the risk of cost inflation once demand for installers, materials, and specialist equipment rises sharply.
Planning early may reduce future risk
Starting preparatory work now, such as audits, cost estimates, and finance planning, may help landlords lock in prices and avoid last-minute pressure. It could also reduce the risk of becoming a “mortgage prisoner” if properties fall outside lender criteria once deadlines approach.
At portfolio reviews, advisers should consider gathering up-to-date EPC ratings and pencilling in a notional allowance of around £10,000 per sub-C property as a planning assumption. Discussing funding options, grants, and timescales early can prevent disruption later.
Turning compliance into opportunity
Energy efficiency upgrades do not need to be treated purely as a compliance cost. When approached strategically, they can form part of standard asset management, helping landlords attract tenants, improve running costs, protect capital values, and access more competitive mortgage pricing.
Advisers who help landlords plan early, understand their options, and integrate EPC improvements into long-term strategy will be well positioned to add meaningful value as the regulatory landscape continues to evolve.
