EPC ratings drive rental values as industry body urges realistic targets

EPC ratings drive rental values as industry body urges realistic targets

EPC target with rising rents shows energy-efficient rental homes attracting higher premiums
9:18 AM, 6th May 2026, 1 week ago 27
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Energy-efficient properties are attracting rental premiums, as an industry body warns that EPC targets need to remain realistic.

Data from the Mortgage Works reveals that an EPC rating is a core driver of a property value.

Propertymark warns EPC targets must be backed by proper funding as all private rented properties will need to meet EPC C targets by 2030.

More than half of PRS homes rated A-C

According to the data, more than half of private rented properties (51%) are rated A-C , up from 25% ten years ago.

The lender explains that part of the improvement is due to newly built properties, which tend to have a much higher energy efficiency rating (around 97% are rated C or above).

The data also reveals the North of England now sees the highest rental premium, with an A or B-rated property commanding a 13.3% higher monthly rent.

An A or B rated property currently attracts an 8.1% rental premium compared to a similar D rated property, up from 7% in 2024.

Targets must be realistic

Megan Eighteen, President of ARLA Propertymark (Association of Residential Letting Agents), says more support is needed to help landlords with the cost of EPC targets.

She said: “Nationwide Building Society’s latest report highlights both the progress made and the ongoing challenge of improving energy efficiency across the private rented sector.

“It’s encouraging that more than half of privately rented homes are now rated EPC A-C, which can help tenants benefit from warmer homes and lower energy bills. However, much of this progress has come from newer properties, with the biggest challenge now focused on older homes that are more complex and costly to upgrade.

“The stronger gains seen in the North reflect lower property values and more room for improvement, making it easier for some landlords to invest. But this varies across the country, and in many cases upfront costs remain a significant barrier.

“We support the ambition to raise standards, but targets must be realistic and backed by proper funding and clear guidance. Without this, there is a real risk that landlords will scale back investment or exit the market. Over time, that could reduce the number of homes available to rent, which may put further pressure on affordability for tenants.”

According to The Mortgage Works, the average costs to improve older properties, particularly those built before 1919, remain significantly higher, with the average cost to upgrade a pre-1919 property to band C around £10,700 (based on 2024 costs).

Properties built more recently tend to be more energy efficient, meaning fewer improvements are required to bring them up to C standard, with the average cost to upgrade a property constructed between 2003 and 2013, currently rated D–G, to C standard at around £2,500.


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Comments

  • Member Since May 2024 - Comments: 213

    8:15 PM, 6th May 2026, About 1 week ago

    If the government actually wanted landlords to increase the EPC of their property, they should start by making it tax deductable, Over the years I’ve got all of our houses to a C except 1, This one will be sold to a firt time buyer or owner, so it will never meet the governments proposal.

  • Member Since April 2018 - Comments: 393

    8:26 PM, 6th May 2026, About 1 week ago

    Reply to the comment left by Desert Rat at 06/05/2026 – 20:15
    My concern would be is once if you now have a “C” this government will move the goalposts and it will become the new “D”.

  • Member Since December 2025 - Comments: 8

    9:21 PM, 6th May 2026, About 1 week ago

    This starmer milliband government like the previous Sunak and gove government are out to destroy the private rental sector and strip all landlords of what little cash and equity they had.
    Bad tenants are now fully empowered to destroy and vandalise private landlords property without any risk of getting in trouble and being made to pay.
    Quite often landlords will pay a bad tenant to leave thus druggie tenants know that by trashing a privately owned property they’ll get rewarded with a handsome payout to leave. Best things any UK landlords can do is sell up and make sure that their money gets invested overseas outside of both the UK and EU.

  • Member Since December 2025 - Comments: 3

    9:27 PM, 6th May 2026, About 1 week ago

    Meanwhile the government are silent on particularly the USA and Israel blowing up oil Wells, and carpet bombing. Would love to see an analysis of the environmental impact of one oil well set alight vs the government’s epc targets.

    All a con. Priorities are corrupt.

  • Member Since January 2025 - Comments: 66

    10:40 PM, 6th May 2026, About 1 week ago

    Reply to the comment left by Reluctant Landlord at 06/05/2026 – 18:39
    The problem of doing nothing is that I don’t think a BTL mortgage company will lend on it if below a C

    My 5 year fixed runs out summer of 2027 and I’m a D, I don’t think I will be able to remortgage as a new fixed deal will take me past the 2028 deadline (for new tenancies)

  • Member Since May 2014 - Comments: 151

    11:51 AM, 7th May 2026, About 7 days ago

    EPC`s are known to be wildly inaccurate. Fitting a couple of low energy bulbs can alter a rating from D to C, that`s so arbitrary as to degrade the value of the energy check. As with many govt. initiatives they don`t realise there`s too few technicians/materials to make useful changes. It`s a smoke screen that tenants are falling for now that energy is outrageously expensive.

  • Member Since May 2018 - Comments: 2059

    1:26 PM, 7th May 2026, About 7 days ago

    Reply to the comment left by David at 06/05/2026 – 10:46
    You’ve all heard of inflation. And it doesn’t matter where you are, an imbalance of supply and demand will cause market rents to rise….it’s the same for example in America as it is here:

    https://home.treasury.gov/news/featured-stories/rent-house-prices-and-demographics

    Elements of the Renters Rights Act and punishing non-incorporated landlords via the tax system both make rent inflation worse. Stopping tenants from renting band D properties would also limit supply.

    You’ve heard of Stagflation:

    https://www.investopedia.com/terms/s/stagflation.asp

    The current government’s policies are stagflationary. They result in low growth, rising unemployment and rising interest rates. We all pay the price and feel the pain of their left-wing ideologies and empty promises. Our tenants feel the pain when the rising interest rates have to be passed on as higher rents because landlords aren’t permitted to offset finance costs against tax, and passed on as early as possible because of new limitations imposed by the Renters Rights Act. A competent government would have reversed the policy of landlords being unable to offset finance costs against rents, especially given the provisions of its Renters Rights Act that will drive up market rents. But then, this government isn’t competent.

    And unless they change them, with the government’s current EPC policies what we are going to see is Edflation:

    https://www.energylivenews.com/2026/04/21/miliband-doubles-down-on-net-zero/

    On top of inflation and stagflation we have Ed’s anti-market-ideology “doubling-down” on us and inflicting more pain as Edflation.

    But democracy is messy and this is what happens when the electorate elects people who don’t know what they are doing. Democracy is better than the alternative…but careful what you vote for.

    The current government isn’t a disappointment to me because I already had low expectations of them and didn’t vote for them. Anybody old enough to have experienced a few labour governments will have understood that hardly any labour politicians have any experience of business and despite labour’s hollow promise to grow the economy, what we would actually be heading for is a sluggish, low-growth economy that would be insufficiently resilient to withstand external shocks. But what a great tragedy it is that on the day when we have widespread local elections across England there isn’t a party out there that is genuinely ‘green’ and understands how to implement sustainable policies. You’d have thought that with Ed’s A-level in physics he might have been capable of understanding that we can’t transport the power from the windmills in the North Sea to where it’s needed, and we also don’t have the capacity to store it. You’d also have thought that in order to implement a policy in the REAL WORLD you’d have to look hard at the tax system to ensure that the market could deliver it. Was he competent?…..apparently not.

    If there’s a glimmer of hope out there in the local elections it will be a party or leader that doesn’t follow the Edflation dogma and isn’t talking about rent controls.

  • Member Since May 2018 - Comments: 2059

    1:36 PM, 7th May 2026, About 7 days ago

    Reply to the comment left by Billy Gunn at 06/05/2026 – 22:40
    I rearranged a BTL mortgage on a band D property last year, the mortgage company didn’t ask either about the EPC rating or any plans to improve it.

    We’ve had governments tell us that we won’t be able to rent out Band D properties before.

  • Member Since April 2018 - Comments: 393

    5:30 PM, 7th May 2026, About 6 days ago

    Reply to the comment left by Beaver at 07/05/2026 – 13:26
    Perfectly explained and the glimmer of hope wont come from anyone in this Marxist government.Let’s all pray Starmer does hang on rather than the thought of a Rayner, Burnham and Polanski leaderships.Better still a general election now.

  • Member Since January 2025 - Comments: 66

    6:13 PM, 7th May 2026, About 6 days ago

    Reply to the comment left by Beaver at 07/05/2026 – 13:36
    It depends on the fixed term length

    I read last year that some BTL already pulled there 5 year deals for properties below EPC C when the proposals were all tenancies need to be C by 2028

    Also remember it’s not been made law yet, it’s still just a proposal, if it was made law then I would presume the mortgage companies would not lend on D and below

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