Landlords across England and Wales may need to spend billions of pounds upgrading rental homes in order to meet new energy efficiency rules planned by the government. Estimates suggest the total cost could reach around £26 billion before the 2030 deadline.
Research by insurance firm Just Landlords indicates that around 3.38 million rental properties currently fail to meet the proposed energy performance standards. The policy forms part of Energy Secretary Ed Miliband’s Warm Homes Plan, which requires all rented properties to achieve at least an EPC rating of C by October 2030.
The typical cost of bringing a non-compliant property up to the required standard is estimated at about £7,600. However, the expense varies significantly depending on location and property type, with some homes—especially in rural and northern areas—potentially costing up to £12,000 to upgrade.
To assess the financial impact, analysts compared retrofit costs with typical rental income in different regions. In some areas, the amount needed for improvements is equivalent to almost half a year’s rental income, making the changes particularly challenging for landlords.
Some regions could face especially severe costs. For example, in Powys, about 83% of rental homes do not currently meet the EPC C requirement. The average upgrade there is estimated at £10,759, while typical annual rental income is only £7,248. That means landlords could face upgrade costs equal to 148% of a year’s rent.
Other areas with similarly high “repair-to-rent” ratios include Hartlepool, the Isle of Anglesey, Gwynedd and Northumberland, where retrofit expenses are also extremely high relative to rental income.
In contrast, landlords in parts of London are likely to find the costs easier to absorb due to higher rents. In boroughs such as Kensington and Chelsea, Westminster and Islington, the cost of improvements represents only around 20–26% of annual rental income, meaning the work could effectively be covered by just a few weeks of rent.
Urban areas generally show higher levels of compliance with the future EPC standard. Locations such as Tower Hamlets, West Northamptonshire and Southwark already have more than half of properties meeting the required rating.
Meanwhile, many rural or coastal districts remain far behind. Areas including the Isles of Scilly, Ryedale and the Isle of Anglesey have some of the highest rates of non-compliant homes, meaning large-scale upgrades will be required.
In the least efficient regions, a large proportion of homes have EPC ratings of E, F or G, meaning they may require major structural improvements such as solid-wall insulation or heat pump installation to reach the required standard.
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