The National Residential Landlords Association (NRLA) has raised concerns that landlords across the UK are unable to afford the proposed costs associated with upgrading rental properties to meet new Energy Performance Certificate (EPC) standards. With government plans requiring landlords to invest up to £15,000 per property by 2028 and 2030, the NRLA warns that without substantial financial support and tax reforms, many landlords will struggle to comply, potentially impacting the rental market and tenants alike.

Government’s EPC Upgrade Requirements

The UK government has set ambitious targets for improving the energy efficiency of rental properties. By 2028, all new tenancies must meet a minimum EPC rating of C, and by 2030, this standard will apply to all tenancies. These measures aim to reduce carbon emissions and improve living conditions for tenants. However, the financial burden on landlords is significant, with upgrade costs estimated to reach as much as £15,000 per property.

Financial Viability for Landlords

Research conducted by the NRLA indicates that once energy efficiency improvements exceed £7,700 per property, the average landlord’s ability to make a profit diminishes considerably. This is a critical threshold, as many landlords operate on tight margins and rely on rental income that often falls below what might be expected for such substantial investments.

Ben Beadle, NRLA chief executive, emphasised the need for realistic support, stating: “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 highlighted that assuming landlords have unlimited financial reserves is misguided and unhelpful in achieving energy efficiency goals.

Impact of Funding Cuts and Taxation

The NRLA’s warning follows the Autumn Budget announcement, which saw a 25% reduction in overall energy efficiency funding for the current Parliament. This cut has been noted by the environmental think tank E3G and raises concerns about the government’s commitment to supporting landlords through this transition.

Moreover, HM Revenue & Customs data shows that unincorporated landlords report an average annual rental income of just £19,400, a figure below the full-time minimum wage. This challenges the perception that landlords are a uniformly wealthy group capable of absorbing large upgrade costs without assistance.

Ben Beadle called for urgent reforms, including fixing the current tax system which does not incentivise proactive property improvements. The NRLA advocates for all energy efficiency spending to be fully deductible against income tax, which would provide a direct financial benefit to landlords investing in EPC upgrades.

Regional Disparities and Investment Caps

The NRLA also warns against a one-size-fits-all national investment cap for EPC upgrades. Such a cap could disproportionately affect landlords in lower-value property markets, particularly in northern regions, exacerbating existing regional inequalities in the private rented sector. Adjusting investment limits to reflect local property values would help ensure fairness and encourage wider compliance.

Looking Ahead: Support for the Private Rented Sector

Despite the government’s energy efficiency ambitions, the recent Budget did not include measures specifically tailored to assist the private rented sector (PRS) in meeting these targets. The Committee on Fuel Poverty has urged ministers to introduce tax incentives to support the necessary investments, but clarity on final proposals remains awaited.

In the meantime, the NRLA continues to engage with policymakers to develop a bespoke support package for landlords, emphasising the need for collaboration to ensure that energy efficiency improvements are both achievable and sustainable.

TLA Trusted Partners Hub Launch

In related news, The Landlord Association (TLA) is preparing to launch a new Trusted Partners Hub in the first quarter of 2026. This platform 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.