EPC reform: what landlords and homeowners need to know about the changes ahead
Energy Performance Certificates have been a familiar feature of buying, selling and letting property in England and Wales for over fifteen years. Following the publication of the Warm Homes Plan on 21 January 2026, the rules governing EPCs and the minimum energy-efficiency standards that accompany them are set for their most significant overhaul in more than a decade.
This article examines what is being proposed, where things currently stand in law, and what the changes are likely to mean for landlords, homeowners and prospective buyers.
Where things stand today
The current legal position has been in place for several years. Under The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, private rented properties must have a minimum EPC rating of E. This requirement has applied to new tenancies since April 2018 and to all existing tenancies since April 2020. Where works are needed to bring a property up to standard, landlords are currently required to spend up to £3,500. Penalties for non-compliance are capped at £5,000 per property per breach.
EPCs are produced using the Standard Assessment Procedure (SAP), which assigns a single A-G rating based largely on the estimated cost of running the property.
The proposed EPC C target by 2030
Under the Warm Homes Plan, the government has confirmed that all privately rented homes in England and Wales must achieve an EPC C, or its equivalent under the new system, by 1 October 2030. This is a single deadline that applies to both new and existing tenancies. The earlier proposal for a 2028 deadline for new tenancies has been dropped.
The cost cap for required works will rise to £10,000 per property, and the maximum penalty for non-compliance will increase to £30,000 per property per breach. To encourage early action, landlord expenditure on relevant energy efficiency improvements from 1 October 2025 will count towards the £10,000 cap. If a property cannot meet the standard within the cost cap, a 10-year exemption may be registered.
It is worth clarifying that, although these proposals are now firmly set out as government policy, the secondary legislation that will amend the minimum energy efficiency standards is expected to be laid before Parliament in 2027. Until then, the current EPC E minimum, the £3,500 cost cap and the £5,000 maximum penalty remain in force.
A new way of producing EPCs
Alongside the new minimum standards, the government intends to replace SAP with a new methodology called the Home Energy Model (HEM). New-style EPCs will display four headline metrics: fabric performance, which measures how well the building retains heat through insulation, glazing and airtightness; heating system, which measures the efficiency and carbon impact of how the property is heated; smart readiness, which measures the property’s capacity to support microgeneration, such as solar panels combined with a smart meter or energy storage; and energy cost, which indicates the estimated annual running cost.
The government has consulted on a dual-metric standard. Under the proposal, a property would first need to meet a fabric performance standard, then either the heating system or the smart readiness standard, with the energy cost metric remaining on EPCs for information only. The Home Energy Model consultation on EPCs closed on 18 March 2026, and the government response, which will set out the precise band boundaries for each metric, is still awaited.
The launch of the new EPCs has slipped in recent months. In a recent update, the government confirmed that the new system will not go live until the second half of 2027.
Properties with a current-system EPC C, achieved before 1 October 2029, are intended to be treated as compliant with the new standard until that EPC expires. This provision is one reason some landlords with borderline D-rated properties may consider acting under the existing methodology while it remains available.
Wider EPC changes
A number of other changes are proposed. An EPC would be required when a property is first marketed for sale or rent, removing the current 28-day grace period. The EPC requirement would apply to whole houses in multiple occupation, not just where individual rooms are let, and to short-term lets. The current exemption for listed and other heritage buildings is set to be tightened, although the government has acknowledged the need for tailored exemption pathways for properties where standard improvements are not appropriate. The existing 10-year EPC validity period will continue under the new regime.
Funding and support
The Warm Homes Plan is backed by up to £15 billion in public funding, some of which is channelled through existing schemes. The Boiler Upgrade Scheme, for example, currently offers grants of up to £7,500 towards the cost of installing an air- or ground-source heat pump. Other support is provided through local authority schemes and is targeted at lower-income households. Landlords and homeowners considering improvement works should check what may be available before committing to a specification.
A brief note on commercial property
Commercial minimum energy efficiency standards follow a separate trajectory from the residential regime. The Warm Homes Plan focuses on private and social rented housing, and government policy on commercial standards is less developed. Owners of mixed-use portfolios will need to consider both regimes carefully and should seek specific advice rather than assume that the timetable for residential reform will align with that for commercial property.
What to do now
For landlords, the first step is a clear-eyed review of each property’s current EPC rating in the portfolio. Properties already at C or above are likely to be in a good position, particularly if a current-system C can be secured before 1 October 2029. Properties at D or below will need a longer-term plan, and landlords would be well advised to keep detailed records of any energy-efficiency spend from 1 October 2025 onwards.
For homeowners considering selling, the new EPC format will start to appear from late 2027 and may present the property in a different light compared with its existing rating. For prospective buyers, the existing EPC remains a useful guide, but it is worth understanding where a property sits under the new metrics if you intend to let it in future. General guidance for tenants and homeowners is also available from the Energy Saving Trust.
If you are planning a property transaction or letting during the period covered by these reforms, do get in touch with your solicitor, who will be able to advise on how the changes affect your particular circumstances.