EPC reform and the role advisers play in guiding landlord clients

Originally published by The Intermediary 

In January, the Government finally published its proposals for minimum energy efficiency standards in the private rented sector in England and Wales. The direction is now clear.

From October 2030, private rented properties will need to meet the equivalent of an EPC C, unless the landlord qualifies for a valid exemption. Alongside the higher standard, there will be a full overhaul of how energy efficiency is assessed. The existing Energy Efficiency Rating, which looks at the estimated cost of heating, lighting and hot water, will be replaced by a new Home Energy Model using updated metrics.

For landlord borrowers, this is not simply a higher bar under the current framework. It represents a different way of measuring performance. In that respect, there is going to be a significant knowledge gap that firstly needs filling, in order for landlords to understand what this means for them, their properties and their future PRS activity.

Advisers can fill some of that gap, supporting clients by explaining what is changing and what that may mean in practical terms.

Moving from EER to a new dual metric approach

A new Home Energy Model will introduce a dual metric standard. In simple terms, landlords will need to think about more than a single headline rating.

One of the key components is the Heating System Metric, which assesses the technologies used to generate heat for heating, cooling, hot water and cooking. The consultation makes clear systems with high efficiency and low carbon emissions, such as electric heat pumps and low carbon heat networks, would always score a C or above.

By contrast, a standard gas boiler would not achieve a C rating on its own. More efficient fossil fuel systems should perform better than higher carbon inefficient systems, but hybrid heating systems that include fossil fuels, such as hybrid heat pump gas boilers, would score a D or below

Electric heating also needs careful explanation. Systems with no, or insufficient, thermal energy storage would always score a D or below. However, electric heating with thermal storage, where off-peak electricity use reduces annual emissions, would typically score a C or above.

For advisers, the role is not to provide technical design advice, but to help landlord clients understand that heating choices made today may affect compliance later. A like-for-like boiler replacement may not future-proof a property in the way some landlords may currently assume.

The cost cap and how it works

The good news is the Government has confirmed a cost cap of £10,000 per rental property in terms of any work required to meet these higher standards. This is lower than the £15,000 proposed in the 2025 consultation.

Where a property is valued at under £100,000, the cap reduces to 10% of the property’s value. This is known as the low-value property exemption.

If a landlord reaches the relevant cost cap and the property still does not meet the required standard, they may register for a cost cap exemption. This exemption will be valid for 10 years, allowing them to continue letting the property.

Importantly, costs incurred from 1 October 2025 will count towards the cap. That makes record keeping essential. Advisers can encourage clients to keep clear evidence of works and spending, not only for tax purposes but to support any future exemption claim.

The Government has also stated the cost cap will be reviewed every five years to take inflation and other factors into account, although there will be no inflationary increase before the 1^st October 2030. This gives landlords a degree of certainty on the current £10,000 figure in the lead up to the deadline.

Putting the 2030 date into context

For some landlords, October 2030 may feel a long way off. Advisers can help bring that date into sharper focus by linking it to mortgage terms. A five-year fixed rate agreed this  year, for example, will already take the property (and the landlord) beyond the 2030 compliance deadline.

That should make energy planning part of any wider funding conversation advisers are currently, or will have, with landlord clients. Borrowers should understand how their current EPC rating, their mortgage term and any planned works fit together. A portfolio approach may be needed where some properties are already at C and others remain at D or below.

By structuring the conversation around timelines and funding cycles, advisers can help clients avoid a situation where compliance becomes a last-minute pressure point.

Supporting improvement with practical incentives

As well as explaining the regulatory framework, advisers can point to practical support available right now. For example, we at Fleet offer a £1,000 cashback payment where a landlord improves the EPC level of a property to C or above during the initial fixed-rate period.

The cashback is available on five-year fixed rate products, excluding EPC A-C options, which completed on or after 1^st July 2023. To qualify, advisers or the client must notify Fleet that the EPC level has improved, and this must be recorded on the official Government EPC register.

The intention behind this feature is clear. It is designed to promote energy efficiency improvements in rental properties and to help landlords meet their changing responsibilities. It also reflects a wider commitment to supporting the Government’s target of achieving net zero carbon emissions by 2050.

A measured, informed approach

The key for advisers is to understand this information yourselves, and then impart that via education and clarity. The minimum standard is rising. The method of assessment is changing. The cost cap is set at £10,000, with defined exemptions and review periods.

Landlord borrowers do not need to be alarmed by this but they do need to understand it. By explaining the new metrics, outlining how the cost cap works and highlighting available support, advisers can help clients move towards 2030 with a plan that is structured, realistic and aligned to their wider investment goals.