What does the EPC shake-up mean for landlords?

By starting early, you can spread your costs and comfortably meet compliance deadlines. Here, we look at what you need to do and by when.

The Warm Homes Plan

In January, the government announced its next plans to cut energy bills and, more generally, to help people live in healthy homes in both the summer heat and the winter cold. It is publicly investing in upgrading properties with better insulation and clean power features, such as heat pumps and solar panels. By moving away from fossil fuels, we don’t just protect the environment – we achieve lower, more stable energy costs.

This plan aims to help all families, including those in the private rented market, where tenants often have little ability to improve the energy efficiency of where they live. Especially if they struggle to afford high energy bills, they can face difficult living conditions. For example, Citizens Advice research in 2023 found that more than 1.6 million children in private rented accommodation risked their health in cold, damp homes.

The government is therefore setting new energy-efficiency goals to lift hundreds of thousands of families out of fuel poverty by 2030. Part of this involves redesigning the EPC system.

A more sophisticated approach

Currently, EPCs (energy performance certificates) rate properties from A to J, with A being the most energy efficient. While this model has been used since 2007, it has significant shortcomings because it scores properties on the cost of energy rather than on actual carbon emissions. A house with an eco-friendly heat pump can get a worse EPC rating than somewhere with an outdated gas boiler, for example.

Expected to launch during the second half of 2027, the new approach supports net zero targets by penalising the use of fossil fuels. It also makes the ratings more transparent by looking at four different areas, along with secondary indicators for energy use and carbon emissions:

1. Fabric performance – better fabrics for walls, roofs, floors and windows mean lower heating and air conditioning demands
2. Heating system – the efficiency and carbon intensity of the space and water-heating equipment
3. Smart readiness  – how well the property can respond to signals from the grid to use electricity during off-peak periods
4. Energy costs  – estimated running costs

What’s more, a new calculation engine called the Home Energy Model (HEM) will be used to assess both new builds and existing homes. The HEM runs on a half-hourly basis – instead of the monthly averages currently used – and is more granular in its approach. For example, it factors in variable electricity prices and grid signals.

In terms of the assessment process itself, this will continue in much the same way – accredited assessors visit properties to study energy efficiency, except they will use the new approach.

What landlords need to do

Your property must reach at least the equivalent of EPC C by the 1st of October 2030, unless you have an exemption. A property that’s rated C or above before the 1st of October 2029 (using either the old or new system) will stay compliant until that certificate expires.

There’s a £10,000 landlord spending cap, and any money you’ve spent on energy efficiency since the 1st of October 2025 counts towards this cap. If your property can’t reach EPC C within this £10,000 limit, you can register for an exemption. 

Experts recommend you first improve the fabrics – like wall and loft insulation – and then move on to heating upgrades or smart readiness measures. Here’s more government info on improving the EPC of private rented homes.

Final thoughts

With penalties of up to £30,000 for non-compliance, it’s important to find out whether your properties meet the new standards and, if they don’t, to start early with any improvements so you can spread the costs and obtain available grants in time. After expert guidance? Speak to your local Winkworth lettings team about meeting the government’s evolving compliance requirements and future-proofing your business.