The National Residential Landlords Association (NRLA) has raised concerns that landlords are unable to afford the substantial costs associated with the government’s proposed Energy Performance Certificate (EPC) upgrades. With minimum EPC rating requirements set to rise to a C by 2028 for new tenancies and by 2030 for all tenancies, the NRLA warns that many landlords do not earn sufficient rental income to cover these expenses, risking the viability of the government’s energy efficiency plans.

Government EPC Upgrade Requirements and Costs

The UK government has set ambitious targets to improve the energy efficiency of rental properties, requiring landlords to ensure a minimum EPC rating of C. For new tenancies, this standard must be met by 2028, and for all tenancies by 2030. To comply, landlords may need to invest up to £15,000 per property in energy efficiency improvements.

However, NRLA research indicates that once expenditure on energy upgrades exceeds approximately £7,700, the average landlord can no longer make a profit from their rental property. This financial imbalance highlights a significant challenge for landlords, particularly those with limited rental income.

Financial Realities for Landlords

The NRLA emphasises that many landlords do not have the financial reserves to fund these costly upgrades. Ben Beadle, NRLA Chief Executive, stated: “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.”

He further criticised the assumption that landlords have unlimited funds, noting that this misconception will not lead to tenants benefiting from improved energy efficiency in their homes. Beadle called on the government to engage with the sector to develop a tailored support package, including reforms to the current tax system, which he describes as “broken” and unhelpful in encouraging proactive property improvements.

Impact of Funding Cuts and Income Levels

The NRLA’s warning follows the Autumn Budget announcement, which saw a 25% reduction in overall energy efficiency funding for this Parliament, a move highlighted by the think tank E3G. This cut further complicates efforts to support landlords in meeting EPC requirements.

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

Calls for Targeted Support and Tax Relief

The NRLA has criticised the recent Budget for lacking measures specifically designed to help the private rented sector (PRS) achieve the government’s energy efficiency goals. The Committee on Fuel Poverty has also urged ministers to introduce tax incentives to facilitate the necessary investments.

In response, the NRLA is advocating for all energy efficiency expenditure to be fully deductible against income tax. Additionally, it recommends that any proposed investment caps should take into account regional property values to avoid disproportionately impacting landlords in lower-value areas, which could exacerbate the existing north-south divide in the housing market.

Implications for UK Landlords

For UK landlords, these developments underline the importance of carefully assessing the financial implications of upcoming EPC requirements. Without adequate government support or tax relief, many landlords may struggle to fund the necessary improvements, potentially affecting rental supply and property standards.

Landlords should stay informed about evolving policies and consider engaging with landlord associations to advocate for fair and practical solutions. Understanding the potential costs and available support will be crucial for maintaining profitability and compliance in the coming years.

Looking Ahead: Trusted Partners Hub

In related news, The Landlord Association (TLA) is preparing to launch a new Trusted Partners Hub in the first quarter of 2026. This initiative will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Service providers in legal, trades, insurance, financial, mortgage, tenant screening, and other relevant sectors are invited to register their interest here.