Landlords across England and Wales could face significant costs as they work to meet the government’s planned energy efficiency requirements by 2030. New research from Just Landlords estimates that around 3.38 million rental properties currently fall short of the proposed standards, potentially leaving the sector with a combined upgrade bill of roughly £26 billion.
The requirements form part of the Warm Homes initiative led by Ed Miliband. Under the plan, privately rented homes must achieve a minimum Energy Performance Certificate (EPC) rating of C by October 2030. The policy is designed to improve energy efficiency in the housing sector while helping reduce household energy use and carbon emissions.
However, meeting the new target could prove challenging for many landlords. The research suggests that the average cost of upgrading a property that does not currently meet the EPC C standard is around £7,633. In some locations, particularly rural or northern areas, the cost of improvements could rise to £12,000 or more depending on the type of work required.
To better understand the financial pressure landlords may face, the study compared the cost of improvements with the potential rental income generated by a property. This comparison was labelled the “repair-to-rent ratio”, which measures how long it might take landlords to recover the cost of required upgrades through rental earnings.
In certain areas, this ratio highlights the scale of the challenge. In Powys, for example, around 83% of rental homes are currently below the EPC C requirement. The average cost to improve a property to the required standard is estimated at £10,759, while the typical annual rent is only about £7,248. This means the upgrade cost is roughly 148% of a landlord’s yearly rental income.
Other areas also show high repair-to-rent ratios. In Hartlepool, the cost of improvements could equal around 138% of annual rental income, while the figure reaches 135% in the Isle of Anglesey and 131% in Gwynedd. Northumberland also ranks among the most affected regions, with upgrade costs equivalent to around 129% of annual rents.
The situation looks very different in London, where higher rental prices mean landlords could potentially cover upgrade costs much faster. In boroughs such as Kensington and Chelsea, improvement expenses represent only about 20% of yearly rental income, meaning the costs could be recovered in a relatively short period.
Similarly low ratios are seen in Westminster, Islington, Hammersmith and Fulham, and Camden, where strong rental markets help offset the expense of energy efficiency improvements. In these areas, the financial burden of meeting EPC targets appears far less severe compared with many rural regions.
The study also highlights major differences in current EPC compliance levels across the country. Many of the most compliant areas are located in large urban centres, where newer properties and ongoing redevelopment projects have already improved energy performance standards.
Among the areas with the highest compliance rates are Tower Hamlets, where around 66% of homes already meet the proposed EPC requirement. Other areas performing relatively well include West Northamptonshire, Southwark, Bracknell Forest, and Islington, all of which have more than half of properties already meeting the expected energy efficiency level.
In contrast, several rural and coastal regions still have a large proportion of homes that do not meet the target. The Isles of Scilly stands out as the least compliant location, with around 90% of properties currently below the EPC C requirement.
Other areas with high levels of non-compliance include Ryedale, Isle of Anglesey, Burnley, and Pendle, where the majority of homes would require improvements before the 2030 deadline.
Many of these regions also face an additional challenge: a high number of homes with very low energy ratings. Properties with EPC ratings of E, F, or G often require more extensive upgrades, sometimes referred to as “deep retrofit” works.
These deeper improvements may include structural measures such as solid wall insulation, upgraded heating systems, or the installation of heat pumps. Such upgrades can be significantly more expensive than simpler measures like loft insulation or draught-proofing.
The research suggests that the Isles of Scilly again ranks highest for properties needing major retrofitting, with around 70% of homes falling into this category. Other areas with large numbers of low-rated homes include the Isle of Anglesey, Ryedale, Eden, and Powys.
Overall, the findings highlight how the cost of meeting EPC targets could vary widely across the country. While some landlords may be able to cover upgrade expenses relatively quickly, others—particularly those in lower-rent regions—may face a much longer and more expensive path to compliance.
With the 2030 deadline approaching, landlords will increasingly need to assess the condition of their properties and plan energy efficiency improvements well in advance. For many in the private rented sector, the coming years could involve significant investment to meet the government’s energy standards while maintaining viable rental returns.
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