Major changes to EPCs coming in 2026

It seems utterly pointless recertifying a property unless anything appropriate has changed e.g. better insulation, new boiler, etc. I guess it would keep the assessors busy!
If they go through with this grade C mandate, then there’s likely to be utter chaos. Well, it’s the traditional way of doing things in this country, what with Brexit and everything being a prime example.
If they also require HMOs to achieve grade C then there’s likely to be absolute carnage as a lot are based on older but larger Victorian buildings. Never mind that this is relatively energy efficient because the use of energy is split between a number of tenants instead of one or two people. Landlords will likely have to evict these tenants en masse to carry out the work, or sell up beforehand. I hope govt are going to provide sufficient alternative accomodation?
At least with an HMO you actually benefit from any savings in the long run. If solar panels continue to decline in price then it might be possible to use those to get a property past the C threshold and get the investment cost back after a few years.

Spend £15k to save £240?
Would you do that in your own home?
I wouldn’t.
These proposals are going to massively increase rents or evictions, or both.
What will happen if landlords do nothing?
I’m currently doing nothing and intend to see how it all pans out.
I pity the tenants who may be made homeless or destitute.
The landlord can always at least sell up and invest where their money is welcome.

Reply to the comment left by Peter Merrick at 12/02/2025 – 16:22
This kind of thing does cause confusion although whether the investment is worth it or not depends upon the landlord’s circumstances.

If the landlord has an incorporated business and anyone is even talking about rent controls it is probably worth making upgrades. This is because band A, B or C properties will probably be rentable at a higher market rent than D properties. Limited companies can offset their finance costs against rents so even if they have to raise extra finance they are not heavily penalised (although whether it’s worth it may still depend upon the availability of relevant capital allowances).

If you are a small portfolio landlord with band D properties, if your total income (rents, pension and all other sources) is below £50K then you are permitted a tax credit allowing tax relief on your financing costs up to 20%. As soon as you are £50k or over the tax system penalises you very heavily for raising finance.

If you have a band D property and enough tax-efficient income today to meet all your spending needs and you manage to squeak through the EPC system and get from band D to C then this may (a) reduce your short term income because of what you have to spend and cannot legally offset because it is capital expenditure (b) increase the value of your property such that you face a high CGT charge (c) increase the IHT charge that your children or other dependents face if you intend to give it to them. And of course if you have to raise rents to cover the extra finance and the extra income pushes you over the £50K limit you could face quite a high penalty for any extra investment.

So whether it’s worth doing or not largely depends upon whether you are incorporated or not. Tenants will only be penalised by this.

But when government comes out with nonsense like this and everyone then tries to work out how to beat a rotten system it does create a lot of confusion.

Anyone know the date after which anything that you spend now does not count towards the £15K cap, if there is one?

Reply to the comment left by Peter Merrick at 12/02/2025 – 16:22
Gong to be a nightmare to evict tenants en masse to carry out the work post Section 21. Firstly unless you have experience in the Court process you’re going to have to go down the Section 8 route and employ a specialist eviction company. Looking at around £2,000 in fees for each tenant. Then what ground are you going to use ? Is actually there a ground for a need to carry out improvements ? Then some tenants won’t leave until the bailiffs arrive and this will cost you a fortune.
Then the HMO is going to be empty with no rent coming in. You’ll be paying the mortgage, council tax and utilities from your own funds. Then you’ve got the cost of the works. Can you actually find somebody to carry out the work ? and what timescale ? Finally when you’re up to the EPC required standard you’re going to have to search for all new tenants again. You’re going to need really deep pockets to do this. I expect most landlords will opt for the easy option and just throw themselves under the nearest bus.

Reply to the comment left by Dylan Morris at 12/02/2025 – 17:27
Dylan, this government and the last are hell-bent on destroying the Private landlords and the Renters’ Rights Bill will be the mechanism by which this is achieved. Enhanced EPCs at frequent intervals will ensure maximum cost to landlords with little gain in terms of energy savings.

As to buses, trains are faster and more effective.

Reply to the comment left by Dylan Morris at 12/02/2025 – 17:27If the improvements required to meet EPC Band C are significant and cause a great deal of disruption then you will have grounds under section 8 for eviction (renovations). Tenants will not benefit from any of these proposals, they will only face dramatically higher rents. At least if you face a £2K eviction fee that will be tax deductible. Many of the costs of improvements that you face to upgrade will not be tax deductible (except to offset your CGT bill when you evict the tenant and sell).

One of my properties is a second flor flat, one of the improvements says to install cavity wall insulation, I assume that the external cavity walls goes right down to ground level so if the people below dont want it how do I go about that. Another problem is when I asked the freeholder if I could replace the windows they asked me to pay £250.00 for the privilege of improving their property, and what if they refuse the cavity what insulation ?

Reply to the comment left by Jack Craven at 12/02/2025 – 18:06
Seems your only option will be to evict your tenant and sell the flat.

Reply to the comment left by Dylan Morris at 12/02/2025 – 17:27
Yes, quite so, especially as most of us are getting on in years anyway. That’s why relatively non-invasive improvements like solar panels will probably be a popular choice for houses that are reasonably close to a C, together with loft insulation (no excuse for anyone not doing that!) and other soft options.

If the worst comes to the worst and you are totally stuck, unable to spend £15K on each property and unable to sell the property, maybe just miss a few mortgage payments and let the mortgage company take care of it whilst you wait for the pension to arrive!

Reply to the comment left by Peter Merrick at 12/02/2025 – 22:05
Apart from several are ground floor flats, thus no access to solar panels or loft insulation… :/
It mentions removing the solid floor and replacing with a concrete insulated floor, something I already know is there, but they will not accept findings, only “newly” installed works, I am tempted to have a company install said insulated floor and see what is said, I mean, when I had a new combi boiler installed I was told paperwork from the company and photos would be fine, this changed to a site inspection…. so there seems to be not only a system set to low ball any prior works, but a system of distrust.

Basically it is set up to ensure the maximum effort / expense / with least trust, setting up to fail or force as many private LL to leave, leaving cheap properties to be snapped up by council or social housing who do not have to follow said rules

Corrupt is the only word that I can think of