New Rules for Rental Property Energy Efficiency in the UK: EPC Rating Thresholds Are Changing – How Can Landlords Respond?
- TBA
- Sep 5
- 4 min read
On 15 June 2025, the UK government officially launched a landmark reform in the real estate sector — the new Energy Performance Certificate (EPC) assessment standard, RdSAP 10, came into effect.
As the most significant upgrade to the EPC system in over a decade, this policy shift will have profound implications for property transactions and the rental market, bringing new compliance requirements, investment considerations, and opportunities for landlords, investors, and industry professionals alike.
PART 1 – Key points of the new EPC rules
(1) What is an EPC?
The EPC (Energy Performance Certificate) has been the key benchmark for measuring building energy efficiency in the UK since it was first introduced in 2007 and extended to all properties in 2008. Ratings run from A to G, providing buyers and tenants with a clear view of running costs and environmental performance — a crucial reference point for decision-making.
(2) Why update the EPC assessment standard?
With energy costs soaring and public awareness of sustainability growing, EPC ratings have gained prominence. Properties with low EPC ratings tend to lose value and suffer longer vacancy periods (over 30 extra days on average). Updating the EPC standards aims to more accurately reflect energy performance and drive the property market toward greener, more efficient housing.
(3) Impact of the new standard on property ratings
The rollout of RdSAP 10 will change how properties are rated, providing greater accuracy. Some homes that previously scored well may see their ratings drop due to poor heat retention, while properties with good insulation, efficient heating systems, or smart energy controls may achieve higher scores.
PART 2 – What the new EPC rules mean for landlords
(1) Compliance requirements & potential fines
Currently, the minimum EPC requirement remains at E rating, but policy trends point to a C rating minimum for all rental properties by 2030 (and for all new tenancies starting in 2028). Failure to meet the threshold can result in fines of up to £5,000, along with reputational damage in the rental market.
(2) Greater difficulty in renting out properties
Tenants are increasingly prioritizing energy efficiency. A low EPC rating means:
Higher energy bills for tenants → less appeal.
Lower alignment with growing environmental concerns → weaker competitiveness.
Vacancies for poorly rated rentals already last 30+ days longer, and under the new rules this challenge will intensify, cutting into landlords’ rental income.
(3) Upgrade costs & challenges
To comply, landlords may need to invest significantly in retrofits. Common upgrades include:
Improving insulation: Adding wall insulation, upgrading doors/windows. Costs: £5,000–£10,000 for full insulation; £2,000–£5,000 for new double glazing.
Replacing heating systems: Switching old gas boilers for efficient models or installing air-source heat pumps. Costs: £2,000–£4,000 for new boilers; £10,000–£20,000 for heat pumps.
Installing smart energy management systems: Smart meters and thermostats. Costs: £1,000–£3,000.
These upgrades also require time, effort, and reliable contractors — adding further pressure on landlords.
PART 3 – Related tax policies
(1) Green tax relief incentives
The UK government offers tax relief on approved energy efficiency upgrades, allowing landlords to offset some of their costs.
(2) Council tax changes
From April 2025, local authorities in England and Wales will double council tax on second homes (‘council tax premium’). This aims to reduce the impact of holiday homes on local housing supply.
It’s expected to affect 500,000+ households across 200 areas, generating £1 billion+ annually. Exemptions apply if:
The second home is an annex attached to the main residence.
Accommodation is employer-provided for work reasons.
Planning restrictions prevent permanent residency (e.g., holiday cottages).
Properties listed for sale/rent can receive a temporary exemption of up to 12 months.
(3) Stamp duty changes
From April 2025:
First-time buyer relief threshold fell from £425k to £300k. With London’s median house price at £366k, many buyers will pay an extra £10k–£15k in tax.
Second home surcharge rose from 3% to 5% (from Oct 2024). Combined with base rates, top tax bands could reach 17% for properties above £1.5m.
Impact: higher transaction costs will influence both pricing strategies for sellers and investment decisions for buyers.
PART 4 – Strategies for landlords
(1) Check your EPC rating early
Use the government’s EPC register (www.epcregister.com) to check your property’s current rating, detailed scores, and upgrade recommendations.
(2) Make a phased upgrade plan
Prioritize low-cost, high-impact improvements first (e.g., energy-efficient lighting, draught-proofing). For major projects (heating systems, insulation), explore government grants or low-interest loans. Always prioritize quality to ensure long-term benefits.
(3) Stay alert to tax policy changes
Keep receipts to claim green tax relief.
Apply for council tax exemptions where possible.
Time property sales/purchases strategically around stamp duty changes.
(4) Improve property management & competitiveness
Maintain your property well, provide good facilities, and respond to tenant needs promptly. Strong management can attract tenants even in a tougher regulatory environment.
The view from TB Accountants
The new EPC rules and related tax policies bring both challenges and opportunities.
By understanding the regulations, investing in upgrades, and planning tax strategies wisely, landlords can improve energy efficiency, boost competitiveness, and secure sustainable returns on their property investments.
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