Millions of landlords are facing eye-watering bills of up to £15,000 per property to comply with new energy efficiency standards.

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

The grades range from A – the most efficient – to G, the least. Typically, newer and better-insulated homes score greater than older, draughtier ones.

About half of all rental properties, equal to around 2.6million homes, sit below the C rating. 

The average cost for landlords to make upgrades is £6,000 per property, the Government estimates, although others claim the actual cost is likely to be higher. 

The Government is launching a 12-week consultation on the measure in England and Wales. 

It says the move would raise living standards for tenants and save them as much as £240 a year on their heating bills.

‘This is a basic issue of fairness,’ Mr Miliband told the BBC. ‘You pay your rent – why shouldn’t you be able to live in a decent, warm home? 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.’

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

He added: ‘The rules are not expected to be confirmed until late 2026 – this is not enough time to retrofit an estimated 2.6million homes. For tenants, this could result in pricier rents and fewer homes to choose from as supply decreases as landlords exit the market.’

How do EPC ratings work? 

An EPC 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 idea of a home’s energy efficiency and suggests where improvements could be made through a ranking system of A to G.

Currently, rental properties must have a minimum EPC rating of E – even for existing tenants that have been in the property a long time. But the Government wants to raise the minimum standard 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, the latest English Housing Survey shows. This means more than half of rental homes would need to be upgraded.

In a 2024 poll of 300 landlords 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 £6,000 estimation.

How can I improve my 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 draughty gaps.

The average cost of adding loft insulation to an E-to-F-rated property is about £800 to £900, and cavity wall insulation £2,700, according to figures from Ovo Energy.

Adding ten solar panels would cost around £6,300 and an air source heat pump totals £5,000 – despite the installation including a government grant for up to £7,500.

Double glazing ranges from £500 to £3,000 per window, says Maximilian Schwerdtfeger at information website The Eco Experts.

EPC assessments are charged at between £60 and £120. You can check a property’s rating at 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 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 major renovations to bring them to C-standard. He believes the average cost per landlord could total as much as £10,500.

‘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,’ Norkett adds.

Under plans set out in the consultation, landlords will not have to spend more than £15,000 upgrading homes.

There is the potential for a £10,000 cap, too, if tenants are charged lower rents or rent the property in a lower council tax band.

Is help available to finance improvements?

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 private landlords in England who meet certain requirements, such as having tenants on low incomes. The grant is scheduled to launch in April.

Landlords can receive one home fully funded as well as a 50 per cent cost contribution towards any additional properties upgraded after the first.

The Great British Insulation Scheme also 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. Visitgov.uk/apply-great-british-insulation-scheme to apply.

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 gov.uk/apply-boiler-upgrade-scheme for more information.

Will Government know if landlords comply?

The minimum energy efficiency standard regulations are enforced by local weights and measures authorities.

If officials believe a landlord has failed to fulfil their obligations, they can be served with a compliance notice. If a breach is confirmed, the landlord may receive a financial penalty.

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

What if property owners don’t play ball?

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