EPC changes are coming: Is now the time to invest?

What landlords need to know about upcoming EPC changes.

The Government plans to raise the minimum energy efficiency standard for rental properties from an EPC (Energy Performance Certificate) rating of E to C by 2030. Energy-efficient homes can attract higher rents and appeal to tenants looking to keep their bills down.

But before you start planning improvements, it’s worth noting that significant changes to how properties are assessed are expected from late 2027.

EPCs: a new A to G

The Government is currently looking at introducing the Home Energy Model (HEM), a new assessment method that will change how your property's energy efficiency is measured. Currently, EPCs provide an overall rating from A to G, with A being the most energy efficient.

Under the proposed system, the single rating will be replaced by four separate measures, giving you a more detailed picture of how your property performs.

The four measures include:

• Fabric performance: How well your property retains heat, including insulation and draught-proofing.
• Heating system: The efficiency and environmental performance of your property's heating system, including boilers and heat pumps.
• Smart readiness: How well your property can support technologies such as solar panels, battery storage and smart energy controls.
• Energy cost: The estimated cost of running your property, based on its energy requirements.

While the Government has outlined these measures, nothing is yet finalised and further changes may occur.

Better performance. What's the investment?

Despite the Government's plans to introduce HEM, the requirement for rental properties to meet a minimum EPC rating of C by 2030 remains in place. So, if your property doesn't currently meet this standard, how much could you need to invest to make it more energy efficient?

There's no one-size-fits-all answer. Two properties with the same EPC rating could need very different improvements, with costs varying depending on the work required.

We spoke with Edward Cannell, Senior Area Manager and energy accreditor at Niche, who explains that 'each property is unique and will require different steps to increase the rating.'

Edward highlights that the current EPC system assesses both energy efficiency and environmental impact. There's a key difference between the two.

'The first rating at the top of the EPC is the Energy Rating. This is the main rating people look at and the one used for Minimum Energy Efficiency Standards (MEES). It's heavily influenced by the cost of heating a property, which means homes relying on electricity or LPG will generally score lower than those connected to mains gas.

The second rating, known as the Environmental Impact Rating, measures how much CO2 the property produces. This is where electricity can score quite well, as it's more environmentally friendly than natural gas', says Edward.

Edward also points out that as EPC assessment criteria continues to evolve, your property could receive a lower rating when reassessed, even if you haven't made any changes. That's because the criteria is regularly updated to reflect advances in building materials, renewable technologies and building regulations.

Under the current Standard Assessment Procedure (SAP), an EPC E rating covers 39–54 points, while a C rating starts at 69. So, if your property is currently rated E, you'd need to gain approximately 15–30 points to reach C under today's system.

But how much would that cost?

Edward explains that the answer depends on your property's age, construction, insulation, heating system and any renewable technologies already installed.

To give you an idea, he's shared the following estimates based on the current EPC system:

Improvement	Estimated cost	Potential SAP points gained
LED lighting throughout	£50–£200	1–2
Hot water cylinder insulation	£20–£60	1–2
Draught-proofing	£100–£300	1–2
Heating controls	£200–£500	2–5
Loft insulation top-up	£400–£800	5–12
Cavity wall insulation	£800–£1,800	8–15
Suspended floor insulation	£1,500–£3,000	2–6
Solar PV panels	£5,000–£8,000	10–20
Internal or external solid wall insulation	£6,000–£14,000+	10–20
Replacing single glazing with double glazing	£4,000–£8,000	2–5

Actual costs and potential rating improvements will vary depending on your property, location and work required. They should not be used to predict performance under HEM.

When should you start to plan energy upgrades?

Energy-efficient homes can help reduce running costs in the long term, attract and retain tenants and make your property more appealing. It’s therefore never a bad thing to look at ways to improve your property's energy efficiency. With that said, if you're considering upgrades specifically to improve your EPC rating, it may be worth holding fire.

Edward recommends waiting for further clarity on the HEM method before committing to major improvements. 'This will represent the biggest overhaul of the UK's building energy assessments since the introduction of the EPC in 2007,' he says.

The Government is expected to share more details soon on how properties will be assessed under the new system. Waiting for this guidance could help you avoid spending money on improvements that may not have the same impact under HEM.

We'll continue to keep our landlords informed and share further advice as the details become clearer.