LANDLORDS will be forced to upgrade their properties at great expense if they don’t reach the right energy standards in a move that will be “bitter pill for landlords to swallow”.
An Energy Performance Certificate (EPC) score of C will be mandatory for landlords, it has been revealed in the Government’s Warm Homes Plan.
All properties have to comply from 1 October 2030. The cost cap for landlords to do this has reduced from £15,000 to £10,000 with a 10% cap of property value for those under £100,000.
Under the new rules, landlords are unlikely to get C under the new Home Efficiency Model, unless they meet the new Heating System Metric.
This entails a heat source pump, electric heating or thermal storage.
The Smart Readiness Metric means properties will either need solar panels or a smart meter – though you can qualify for exemption for some properties.
VAT on improvements is currently at 0% but this also increases to 5% in April 2027.
This comes just weeks after Nationwide warned that tenants could be facing higher rents during 2026.
Landlords need clarity
Omer Mehmet, Managing Director at Trinity Finance, said landlords need more clarity.
He added: “Raising energy standards across all homes is the right long-term goal and it’s sensible that rental properties meet a high efficiency bar. This will mean lower bills and better living conditions. But the challenge is delivery.
“Requiring EPC C by 2030 under evolving metrics creates uncertainty and real cost pressures, especially for older stock. Landlords need clarity and time to plan, otherwise the risk is reduced supply and higher rents rather than a smooth transition to greener homes.”
Michelle Lawson, Director at Fareham-based Lawson Financial, said this is a “bitter pill for landlords to swallow”.
She continued: “Being or becoming a landlord is akin to being a Scout – be prepared! The knock on effect for the most vulnerable in society will be less housing choice and to be left within the constraints of a corporate landlord and broken housing system along with increased rents as landlords look to pass these costs on.
“Landlords need to be reviewing their portfolio now and looking at how these works will be funded. This could also increase costs further from the trades and suppliers to meet regulation due to having a captive audience.
“The rental sector is under so much pressure, after years of relentless barrage, with the upcoming Renters Rights too. This could be a bitter pill for most to swallow and time for smaller landlords to take the woggle off and retire leaving the more resilient who are diversifying and leaving the traditional housing stock.”
This is brutal
Kate Allen, Owner at Kingsbridge-based Finest Stays, said it is pushing her towards selling up.
She added: “This is brutal. As a landlord of an HMO in London, it seriously pushes me towards selling up. The financials simply don’t justify shelling out thousands to comply with ever-shifting rules.
“Constantly changing the goalposts makes planning impossible and will drive good landlords out of the sector. The likely result is reduced housing stock, higher rents and more pressure on tenants, not better outcomes.”
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said he worries that the government will move the goalposts of what is expected at a later date.
He continued: “By mandating a C rating by 2030 while simultaneously warning that the measurement metrics will change, this clueless government is forcing diligent landlords to spend thousands today on upgrades that might be deemed worthless by a new algorithm tomorrow.
“The reduction of the cost cap to £10,000 is a token gesture that does nothing to mitigate the chaos of forcing heat pumps into Victorian terraces that were designed for coal fires.
“This policy will inevitably trigger another exodus of small landlords who simply do not have the liquidity or the stomach to navigate yet another regulatory minefield. The result will not be greener homes but fewer rental homes, as the stock is sold off to owner-occupiers or, worse, left to rot.”
