Landlords are being advised to watch for correspondence regarding faulty insulation and forthcoming repair arrangements following the government’s decision to end the Energy Company Obligation (ECO) scheme in March 2026. This development is significant for landlords managing properties with insulation installed under the ECO4 or Great British Insulation Scheme (GBIS), as many homes require remedial work to address serious defects.

Background on insulation issues and government response

The National Audit Office (NAO) recently reported that 98% of homes fitted with external wall insulation under the ECO4 scheme have defects that could lead to damp and mould problems. Despite this high failure rate, the government has yet to provide a clear timeline for completing the necessary repairs. Chancellor Rachel Reeves confirmed in the Autumn Budget that the ECO scheme will conclude in March 2026, raising concerns about the continuity of support for affected properties.

Earlier this year, 39 companies were suspended from installing solid wall insulation after routine inspections uncovered significant failings. The government committed to ensuring that these installers rectify defects free of charge. However, as of mid-September 2025, only 2,900 homes had been fully repaired, indicating a slow progress in addressing the issues.

Implications for landlords and tenants

The National Residential Landlords Association (NRLA) has warned landlords that properties with insulation installed under ECO4 or GBIS may receive letters from Ofgem if the work is substandard. These letters will be sent directly to the property address, so landlords are encouraged to inform tenants to be vigilant and report receipt of such correspondence promptly.

The government is also urging recipients of audit invitations to grant access to qualified professionals to enable identification and rectification of problems. Importantly, even if the original installer is no longer operating, guarantees under ECO4 or GBIS should still apply, providing some reassurance to landlords.

End of ECO scheme and introduction of Warm Homes Plan

Chancellor Rachel Reeves announced that the ECO scheme will be replaced by the Warm Homes Plan, intended to help homeowners reduce energy costs and improve energy efficiency. The new plan includes grants for heat pumps and support for renters and low-income households. Although initially scheduled to launch earlier in 2025, the Warm Homes Plan rollout has been delayed, with a government minister confirming it will now commence before the end of the year.

Industry experts have expressed concerns about the abrupt termination of the ECO scheme. Anna Moore, CEO and founder of retrofit consultancy Domna, criticised the decision to cut £1.3 billion in funding, highlighting the potential negative impact on low-income households, small and medium-sized enterprises (SMEs), and the wider effort to combat fuel poverty and climate change.

Moore emphasised the importance of a smooth transition between ECO and the Warm Homes Plan to protect residents, jobs, and progress in home energy upgrades. She warned that without an extension of the ECO scheme, the sector risks losing skilled installers and coordinators, which could undermine efforts to improve the UK’s ageing housing stock and meet climate goals.

What landlords should do now

Landlords should closely monitor any communications from Ofgem or other authorities regarding insulation defects and repair plans. It is advisable to maintain open communication with tenants to ensure they report any letters or audit invitations promptly. Understanding the guarantees associated with ECO4 and GBIS can help landlords manage repair obligations and liaise effectively with contractors or government bodies.

Given the upcoming end of the ECO scheme, landlords should also stay informed about the Warm Homes Plan and any available grants or support that may benefit their properties and tenants in the future.

Upcoming support from The Landlord Association

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest to join the hub, offering landlords access to trusted professionals for property-related services.