Private Renters EPC Consultation - Landlord Exemptions

The minimum targets for EPC ratings on privately rented dwellings in England are under review.

It's proposed that more landlords will be expected to spend more money to improve the energy performance of the houses they rent out.

My previous posts have looked at the technical changes. This post is for the landlords.

Image shows a rundown English dwelling that needs improvement. AI clearly thinks well of us Brits!.

Due for implementation from 2028, the new rules will mean far more properties fall in the catchment of ‘needs improvement’, and the bill that landlords are expected to spend on making these improvements is jumping four-fold.

But there are a raft of clauses, exemptions and updates that landlords need to know about:

💰 Starting with the cost cap – that’s the value a landlord is expected to spend on improving the property. It’s proposed this will be raised from £3,500 to £15,000 per dwelling.

However, this total could be reduced on properties with a lower rental income or lower tax band. There could even be a sliding scale introduced so the landlord spends more if the rent is more.

⛱️ Currently, houses used for short-term stays and holiday lets are exempt from EPC targets. The proposals will change this, so all those AirBnB owners will need to make improvements.

👨‍👨‍👧‍👧 Similarly for houses of multiple occupation (HMO), it's proposed to remove this exemption, so EPC targets are checked every time a room is rented to a new tenant.

🏰 Through the EPC Reform consultation, it’s proposed that listed buildings should have EPCs, even if some of the recommended improvements can’t be actioned due to the protected status. eg. Adding loft insulation or changing the heating system might be acceptable.

✨ If a landlord has completed improvements, reached the cost cap, and still below target, they can apply for an ‘all relevant improvements made’ exemption, which will last for 10 years.

🏗️ A high cost exemption works in the same way. If none of the recommendations can be actioned within budget, the landlord can apply for this exemption.

🧱 There is a ‘Wall insulation exemption’ for when expert advice shows the wall construction isn’t suitable for insulation upgrades. This is a nod to recent news articles about ECO-4 installation, and Araab's Law - we don't want to create mould by renovating old buildings.

🔻 If the landlord can prove the upgrades will devalue the property by more than 5%, they can claim an exemption.

🛑 If the tenant, or another third party such as the freeholder or joint landlord, refuse to allow works to be completed, an exemption for ‘third party consent’ can be claimed. I like to think this won't be used as a loophole. Hopefully there'll be robust checks in place.

The Improving the Energy Performance of Privately Rented Homes consultation is open for public feedback until 2nd May 2025. 

Here's a link to the consultation:

https://www.gov.uk/government/consultations/improving-the-energy-performance-of-privately-rented-homes-2025-update