Exploring the Impact of Proposed EPC Changes on the Private Rental Sector

The government’s planned overhaul of Energy Performance Certificate (EPC) regulations represents a major shift in how energy efficiency will be assessed and enforced in the private rental sector. If implemented, these changes will require landlords to adopt a proactive approach to improving their properties, potentially reshaping investment strategies and property management practices.

With compliance deadlines phased between 2026 and 2030, landlords have time to prepare, but the complexity and financial implications of the changes mean early action could be critical.

Timeline for Compliance

The proposals set out a phased implementation timeline:

• Second half of 2026: The new EPC system will be introduced, with updated metrics reflecting fabric performance, heating systems, and smart readiness.
• From 2028: All new tenancies must meet the updated energy efficiency standards, expected to be equivalent to EPC C. The government’s current proposal is that any property that does not have at least a ‘C’ rating in 2028 cannot be rented out.
• By 2030: All rental properties, regardless of tenancy status, must meet the new standards unless a valid exemption is registered.

Exemptions and Cost Caps

The government has proposed a £15,000 cost cap per property, meaning landlords will not be required to spend beyond this limit. Importantly, any costs incurred before the new rules come into effect (likely in 2026) will not count toward the cap.

Additional exemptions include:

• New ownership exemption: Landlords who purchase properties with tenants in situ will have six months to bring the property up to standard before enforcement begins.
• Consent-related exemptions: If improvements require permission from freeholders, planners, or tenants and consent is denied, the property may qualify for an exemption.
• Property devaluation exemption: If a chartered surveyor confirms that the required improvements would reduce the property’s market value by more than 5%, the property may be exempt.

These exemptions will require proper registration and documentation to be valid.

Tougher Penalties for Non-Compliance

The government plans to increase penalties for landlords who fail to comply with the new standards. Fines will rise from the current maximum of £5,000 per property to £30,000 per property, per breach. The per-breach nature of the fines means that landlords with multiple non-compliant properties could face substantial financial exposure.

Encouraging Early Action

Landlords are being encouraged to act now rather than wait until the new rules take effect. Properties upgraded to meet EPC C under the current system before 2026 will be recognised as compliant until the EPC expires (typically 10 years).

Final Thoughts

The proposed changes to EPC regulations represent a major shift in the private rental market, and landlords should begin preparing now by assessing their properties, exploring available funding options, and understanding the exemption criteria.

At Brown&Co, we are committed to helping our clients navigate these changes and stay ahead of regulatory requirements. By acting early and taking a strategic approach, landlords can not only comply with the new rules but also enhance the value and appeal of their properties.

For further advice or assistance, please contact Josh Bailey, Senior Lettings Negotiator, on 01603 629871 or email josh.bailey@brown-co.com.