The National Residential Landlords Association (NRLA) has issued a warning that many landlords will struggle to afford the proposed Energy Performance Certificate (EPC) upgrades required by the government. With costs potentially reaching up to £15,000 per property, the NRLA highlights that the current funding model is unsustainable and risks failing before it begins, posing significant challenges for landlords and tenants alike.

Government’s EPC Upgrade Requirements

The government plans to raise the minimum EPC rating for rental properties to a band C by 2028 for new tenancies and by 2030 for all tenancies. This initiative aims to improve energy efficiency across the private rented sector (PRS), reducing carbon emissions and lowering energy costs for tenants. However, the financial burden placed on landlords is substantial, with upgrade costs estimated to reach as much as £15,000 per property.

According to NRLA research, landlords begin to lose profitability once energy efficiency spending exceeds approximately £7,700 per property. This figure is critical because it highlights the financial limits many landlords face, especially those with modest rental incomes.

Financial Challenges for Landlords

Ben Beadle, the NRLA’s chief executive, emphasises the need for a practical support plan to enable landlords to make these energy efficiency improvements. He states, “We want all rental properties to be as energy efficient as possible. However, this isn’t going to happen without a serious plan to support the investments needed.”

Beadle further criticises the assumption that landlords have unlimited financial reserves, noting that this misconception undermines efforts to improve housing standards. He calls for government engagement with the sector to develop tailored support packages and for reforms to the tax system, which currently offers little incentive for proactive property improvements.

Impact of Recent Budget Cuts

The NRLA’s concerns come in the wake of the Autumn Budget, which saw a 25% reduction in overall energy efficiency funding for this Parliament, as highlighted by the think tank E3G. This cut exacerbates the difficulties landlords face in meeting the new EPC standards, especially when many landlords are not financially robust.

Data from HM Revenue & Customs (HMRC) reveals that unincorporated landlords report an average annual rental income of just £19,400, a figure significantly below the full-time minimum wage. This statistic challenges the government’s perception of landlords as a uniformly wealthy group capable of absorbing substantial upgrade costs.

Calls for Targeted Support and Tax Incentives

The NRLA points out that the recent Budget did not include measures specifically designed to help the PRS meet the government’s energy efficiency goals. This omission is notable given the Committee on Fuel Poverty’s recommendation for tax incentives to encourage investment in energy improvements.

Landlords are awaiting clarity on the government’s final proposals. In the meantime, the NRLA advocates for all energy efficiency expenditure to be fully deductible against income tax. Additionally, it urges that any investment cap on EPC upgrades should consider regional property values to avoid disproportionately impacting landlords in lower-value areas, which could deepen the existing north-south divide in the housing market.

Implications for UK Landlords

For landlords, these developments underscore the importance of carefully assessing the financial viability of EPC upgrades and engaging with industry bodies to influence policy. Without adequate support and realistic funding models, many landlords may be unable to comply with the new standards, potentially reducing the availability of rental properties and affecting tenants.

Agents and property managers should also be aware of these challenges, as they will need to advise landlords on compliance strategies and monitor evolving government guidance closely.

Looking Ahead: Trusted Partners Hub

In response to the growing complexities faced by landlords, The Landlord Association (TLA) is launching a new Trusted Partners Hub in the first quarter of 2026. This platform will feature verified and approved service providers across legal, trades, insurance, financial, mortgage, tenant screening, and other sectors, aimed at supporting landlords, tenants, and property management businesses.

Service providers interested in joining the Trusted Partners Hub are invited to register their interest at landlordassociation.org.uk/become-a-tla-service-partner/.