Introduction
Big changes are on the way for landlords in England when it comes to EPCs and minimum energy efficiency standards.
As part of the Government’s Warm Homes Plan, announced on 21 January 2026, new rules will begin to take effect from 1 October 2029, with a hard compliance deadline of 1 October 2030. These changes will have a significant impact on the private rented sector.
Having spent time working through the detail, the headline message is simple enough (reach EPC C by 2030 unless you qualify for an exemption), the reality is more complex.
That’s because how EPCs are calculated will change from October 2029. Under the new system, a property that currently achieves EPC C – even with good insulation and an efficient gas boiler – may no longer qualify.
Some details may still evolve, but the direction of travel is clear. And when it comes to regulation, we always think it’s better to plan early and stay in control.
Let’s start with what’s changing and where landlords have some breathing room.
What Will the New Minimum Energy Efficiency Standard Be?
By 1 October 2030, all rental properties in England will need to:
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Achieve EPC Band C, or
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Be registered with a valid exemption
However, any EPC issued from 1 October 2029 onwards will not be assessed under the EPC system as we know it today.
Instead, EPCs will be calculated using a new methodology called the Home Energy Model (HEM) and it will be significantly tougher to reach Band C under this system.
Before we get into the new metrics, it’s worth covering the key exemptions, as these will be important for many landlords.
EPC Exemptions - What Still Applies?
1. Cost Cap
Landlords will not be required to spend more than:
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£10,000 per property, or
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10% of the property’s value if it’s worth under £100,000
Importantly, the cost cap clock started on 1 October 2025. Any qualifying improvements made since then can be counted towards this limit.
If you’ve already invested in insulation, windows, or heating upgrades, that spend matters.
2. Solid Wall Insulation Exemption
There will be a 10-year exemption for landlords who choose not to install solid wall insulation.
This applies where:
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Solid wall insulation is the only remaining measure needed to meet the new Fabric Performance Metric, and
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The landlord decides not to proceed due to risk
The Government has acknowledged that incorrectly installed solid wall insulation can increase the risk of damp and mould, particularly in older, traditionally built homes.
For many Victorian and Edwardian properties, this exemption will be relevant. Landlords will need to make a declaration confirming that the property remains below standard solely because solid wall insulation has not been installed.
3. Third-Party Consent
This exemption already exists and will continue.
It applies where required improvements need consent from:
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A freeholder
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Planning authority
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Mortgage lender
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Tenant
If consent is refused, despite genuine efforts to obtain it, a landlord may register an exemption.
Most third-party consent exemptions last five years, except where consent is refused by a tenant, in which case it lasts until the tenancy ends.
4. New Landlord Grace Period
If you purchase a property with tenants already in place, you’ll have six months before enforcement action can begin.
This gives new landlords time to assess the property and plan upgrades.
5. All Relevant Improvements Made
If an EPC or improvement report confirms that no further improvements are possible, and the property still falls below the standard, an exemption can be registered.
6. Negative Impact Exemption
This exemption recognises that not all properties are the same.
Landlords may apply for an exemption where they can show that:
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A measure would negatively affect the building, or
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It would reduce the property’s value by more than 5%
This is particularly relevant for heritage buildings and older housing stock.
The Home Energy Model (HEM) - What’s Changing?
From 1 October 2029, the Home Energy Model will become the only method for issuing EPCs.
The current system is based on estimated running costs. The new model focuses much more heavily on fabric performance and carbon impact.
Under the proposals, landlords will need to achieve EPC C against:
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The Fabric Performance Metric, and
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Either:
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The Heating System Metric, or
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The Smart Readiness Metric
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This is known as a “fabric first” approach.
Fabric Performance Metric
This measures how well a building retains heat, including:
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Insulation levels
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Window quality
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Airtightness
Think of this as the foundation. Landlords must meet this metric first, or hold a valid exemption, before addressing the second requirement.
Heating System Metric
This assesses how heat, hot water, cooling and cooking are generated.
Under the consultation proposals:
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Heat pumps and low-carbon heat networks will always score EPC C or above
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Gas boilers, even efficient ones, will not achieve EPC C
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Electric heating without thermal storage will score D or below
In short, homes relying on primary fossil fuel heating are unlikely to meet EPC C under this metric.
Smart Readiness Metric
Despite the name, this largely focuses on micro-generation, such as:
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Solar panels
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Smart meters
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Technology that optimises energy use
The consultation states that solar panels combined with a smart meter would be sufficient to achieve EPC C under this route.
Choosing between the heating route or smart readiness route will be a key decision for landlords and one that’s worth getting advice on.
Transition Arrangements - A Key Opportunity
There is some genuinely good news.
Any EPC C obtained before 1 October 2029 will remain valid under the current rules, even after the Home Energy Model comes into force.
These EPCs may remain valid for up to 10 years, potentially taking landlords through to 2039.
It’s likely EPC assessors will be extremely busy in 2029, as many landlords look to renew early and lock in compliance.
What If You Don’t Meet EPC C by October 2029?
Landlords will have one year to:
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Obtain a new EPC under the Home Energy Model
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Complete any required improvements
By 1 October 2030, if a property does not meet EPC C and does not have a valid exemption, it will be illegal to let.
Penalties will apply.
What This Means for Landlords
There’s a lot to think about and no one-size-fits-all solution.
Grants may be available, particularly where tenants are on benefits, and the right approach will depend heavily on property type, construction and budget.
What is clear is this:
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Landlords still have time
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Early planning gives you more options
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Doing nothing is the riskiest approach
Many landlords have already invested to reach EPC C. While the deadlines have moved, those improvements still matter, especially with the transition arrangements in place.
At Personal Economy Lettings, we help landlords stay ahead of compliance changes without panic or guesswork. We’ll keep tracking these proposals as they develop and help you understand what action – if any – makes sense for your portfolio.
If you’d like a clear, property-specific view of where you stand, just get in touch.
