In a government press release issued on 23 September, it was confirmed that the Labour Party will be consulting on “proposals for private and social rented homes to achieve Energy Performance Certificate C or equivalent by 2030”.

The announcement also mentioned that the government will be consulting on “proposals for improvements to Energy Performance Certificates to make them more accurate and reliable”. This news has been welcomed within the private rented sector, as the current system is considered inaccurate and unreliable.

Some properties within the private rented sector will qualify for the new Warm Homes: Local Grants, also announced on 23 September. It all forms part of Labour’s Warm Homes Plan to “upgrade Britain’s homes and cut fuel poverty”.

In this post we’re exploring the latest news and rules on private rental property energy efficiency upgrade requirements, including tips on how to improve EPC rating.

Will EPC Grade C be mandatory in private rented properties by 2030?

At present, private rented homes can only be legally rented out if they meet Energy Performance Certificate (EPC) band E. Social rented homes have no minimum energy efficiency standard at all.  

The government will shortly consult on proposals for private and social rented homes to achieve Energy Performance Certificate C or equivalent by 2030. 

However, there is nothing concrete to report as yet. Proposals will need to be discussed, before a Bill can be entered into the parliamentary process, and only when that becomes an Act can cast iron changes be put in place. Once the consultation document is published, we will know more.

Will landlords be given a cost cap for the new EPC rules?

Again, this is as yet another unknown. There have been questions asked as to whether there will be a costs limit for landlord EPC upgrades when the new rules come in.

Currently, there is a £3,500 cost cap for rental property energy efficiency upgrades to reach EPC band E.

The previous government proposed a cost cap of £10,000 for EPC C upgrades. The Warm Homes: Local Grant will provide up to £15,000, so it may be that £15,000 will become the cost cap. But we won’t know for sure until the consultation is finished.

Who will qualify for the Warm Homes: Local Grant?

The government has announced details of who will benefit from the Warm Homes: Local Grant for rental property energy efficiency upgrades and cleaner heating from 2025.

The funding, which will be managed by local authorities, will require certain criteria to be met:

1. Current EPC rating must be D to G

Only properties in England with an EPC rating of between D and G will be eligible for the funding.

2. New or self-builds

Funding must support the retrofit of existing domestic dwellings only. New build or self-built homes which have not been previously occupied are not eligible for funding.

Landlord eligibility

Under the grant, landlords with low-income tenants who meet the household eligibility criteria (see below) and who live in properties that meet the above criteria, can access grant funding.

The grant will fully fund upgrades for one property per landlord. Further properties owned by the same landlord will require a 50% landlord cost contribution towards the total cost of works.

Landlords will not be restricted on applying for the grant based on the number of properties that they own. They will be free to upgrade as many eligible properties as they wish, as long as they do not exceed the Minimum Financial Assistance (MFA) limit (see below) and meet the required contribution to the costs of upgrades from the second property treated onwards.

For band F and G EPC rated properties, landlords must seek registered exemptions under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to qualify for the grant.

This is because funding cannot be used to make such properties compliant with existing regulations. However, funding may be used to improve the property beyond the minimum legal requirement.

There are three declarations that will be required from landlords to qualify for the Warm Homes: Local Grant. These are:

1. Express permission for landlord details to be shared and stored on a central database of landlords participating in grant.
2. Agreement to support DESNZ-led surveys or evaluations regarding private rented sector uptake in the grant.
3. Confirmation that the Minimum Financial Assistance threshold will not be exceeded by the landlord receiving the proposed assistance.

Upgrades to private rented properties will constitute a subsidy to landlords under the Subsidy Control Act (2022).

This means that local authorities will be required to ensure that the rental property energy efficiency subsidy to each landlord does not exceed the Minimal Financial Assistance (MFA) limit of £315,000

This includes the value of any Warm Homes: Local Grant support to be given to the landlord, in addition to any previous subsidy received by the landlord over the current and previous two financial years. This ensures no single landlord receives excessive amounts of funding, as well as reducing the administrative burden on local authorities.

Household eligibility criteria

There are three ways to meet the household eligibility criteria:

1. IMD:ID eligible postcodes – these are based on the Indices of Multiple Deprivation (IMD): Income Deciles (ID) areas.
2. Income proxies – if the household is in receipt of a specific means-tested benefit (Housing Benefit, Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Pension Credit or Universal Credit) or meets the current ECO4 Flex Criteria.
3. Household income threshold – the household’s gross annual income from every member of the household other than those in full time education must be less than £36,000.

Local authorities will be required to undertake “robust checks” to verify that households meet the eligibility criteria.

How to improve EPC rating: Practical steps for private landlords

Improving the EPC rating of a rental property not only makes it compliant with upcoming regulations, but also more energy-efficient and therefore appealing to tenants.

Here are some key areas that landlords should focus on when looking to improve their EPC ratings:

Heating system upgrade

One of the quickest ways to improve rental property energy efficiency is to upgrade the heating system. The type of heating and its efficiency play a significant role in the overall score.

Efficient Boilers: Modern condensing boilers are much more energy-efficient than older models. If the property’s boiler is over 15 years old, replacing it with an A-rated condensing boiler can result in substantial energy savings and a higher EPC rating.

Heating Controls: Adding smart heating controls like programmable thermostats and thermostatic radiator valves (TRVs) can also improve efficiency. These allow tenants to control the heating more precisely, reducing wasted energy.

Renewable Heating Solutions: For landlords aiming to future-proof their properties, renewable heating systems like air source heat pumps or ground source heat pumps offer long-term savings, though these solutions come with higher upfront costs. Funding may be available, however.

Property insulation

Insulation is crucial for retaining heat and improving energy efficiency, making it a priority for landlords looking at how to improve EPC rating levels.

Cavity Wall Insulation: If the property was built between 1920 and 1990, it’s likely to have cavity walls. Installing insulation in these walls can be one of the most cost-effective ways to reduce heat loss.

Solid Wall Insulation: For older properties with solid walls, either external or internal insulation can make a dramatic difference to energy efficiency. Though it’s a more costly improvement, the impact on EPC ratings is significant.

Loft Insulation: Heat loss through the roof can account for up to 25% of a building’s energy inefficiency. Upgrading loft insulation to at least 270mm of thickness is a relatively inexpensive way to cut down energy consumption and improve EPC ratings.

Floor Insulation: Older properties with timber floors may also benefit from underfloor insulation, reducing draughts and retaining heat.

Double or triple glazing

Replacing single-glazed windows with double or triple glazing can significantly improve a property’s EPC rating by preventing heat from escaping and reducing the need for heating.

Double glazing offers:

• Better insulation from external temperatures
• Reduction of draughts and cold spots in the home
• Improved noise insulation, which can be a selling point for tenants

For landlord EPC upgrades on a budget, secondary glazing may also be an option, where an additional pane is added to existing windows without the need for a full replacement.

Hot water efficiency

Landlords can improve energy efficiency by focusing on how hot water is generated and stored.

Insulate Hot Water Tanks and Pipes: If the property has a hot water cylinder, ensuring it is properly insulated with a hot water tank jacket can save on heating costs. Additionally, insulating exposed pipes will prevent heat loss as water moves through the system.

Upgrade to a Modern Water Heating System: Installing more efficient water heating systems, such as solar water heating, can also provide a sustainable solution that increases the EPC rating. Solar water heating systems use energy from the sun to heat water, reducing reliance on fossil-fuel generated power.

Energy efficient lighting

Switching to LED light bulbs is one of the simplest and cheapest ways to improve rental property energy efficiency. LED bulbs use around 90% less energy than traditional incandescent bulbs and last much longer.

Adding smart controls such as motion sensors and dimmer switches in areas like communal hallways or living spaces can also contribute to energy savings, ensuring that lighting is only used when needed.

Seal gaps and draughts

Improving a property’s airtightness is a simple yet effective way to prevent heat loss. Draughts can enter through gaps around doors, windows, or even chimneys, impacting the energy efficiency of the home.

Draught-proofing windows and doors: Adding seals around windows and doors can prevent cold air from entering and warm air from escaping.

Chimney Draught Excluders: For properties with unused chimneys, installing a chimney draught excluder will block cold air from entering the home, further boosting the property’s EPC rating.

Renewable energy solutions

Although they can require a significant initial investment, renewable energy solutions are becoming more common as landlords seek to future-proof their rental properties. Funding may be available, however, in certain circumstances, and the long term benefits can often outweigh the initial investment.

Solar Panels: Solar photovoltaic (PV) panels generate electricity from sunlight, which may lower energy bills for tenants. Properties with solar panels typically receive a higher EPC rating, and they also contribute to long-term energy savings.

Solar Thermal Panels: Solar thermal panels can be used to heat water and can work alongside an existing heating system. These are particularly useful in homes with high hot water demands.

Appliance upgrades

Appliances like fridge freezers, washing machines, and dishwashers can affect a property’s EPC rating if they are inefficient.

One of the most straightforward landlord EPC upgrades is replacing ageing appliances with modern, A-rated energy-efficient models can help reduce the overall energy consumption of the property. This is particularly relevant for furnished rental properties, where the landlord provides appliances as part of the tenancy.

These upgrades will not only improve your rental property’s EPC rating, but also make the home more comfortable and appealing to tenants, reduce energy costs, and help future-proof against upcoming regulations.

Each upgrade, from insulation to renewable energy systems, contributes to better energy performance, ensuring compliance with the anticipated stricter EPC standards in the near future.

Securing your rental investment in times of change

The new Labour Government is in the process of introducing a raft of changes for private landlords, including various new rules around rental property energy efficiency.

With all this in mind, ensuring your property is managed efficiently is vital.

With City Borough Housing’s guaranteed rent scheme, you can safeguard your rental income and benefit from inclusive professional property management services, including tenant sourcing and maintenance, supporting you as the legal landscape changes.

Contact our team to explore how our services can help you keep your head above water in an evolving landscape, and to request your free rental valuation to discover how much you could secure for your property every month.