The government has insisted that landlords will not need to put up rents in order to meet new Energy Performance Certificate (EPC) C standards by 2030. This claim comes despite its own consultation documents suggesting that the changes could place financial pressure on landlords and potentially affect rents.
Under the Warm Homes Plan, ministers confirmed that all privately rented homes must reach at least an EPC rating of C by the end of the decade. The policy is designed to improve energy efficiency and reduce household energy bills for tenants across the country.
However, a government consultation published alongside these proposals paints a more complicated picture. It acknowledges that some landlords may struggle with the cost of upgrades and could respond by increasing rents or selling their properties altogether.
The issue was raised in Parliament by Conservative MP Paul Holmes, who asked whether the government had assessed how the cost of new energy efficiency measures might affect open market rents in the private rented sector.
In response, Energy Consumers Minister Martin McCluskey said the government does not believe landlords will need to charge higher rents to cover the cost of improvements. He explained that the government had consulted widely with both landlord and tenant groups when shaping the policy.
He added that several measures have been proposed to support landlords in meeting the new standard. According to the minister, these changes are intended to improve housing quality while also helping tenants reduce their energy bills through better insulated and more efficient homes.
McCluskey stated that the reforms should not force landlords to raise rents. Instead, he said the aim is to make properties cheaper to run, benefiting tenants without creating extra pressure on rental prices.
Despite this reassurance, the consultation document itself admits that some landlords may decide to leave the rental market rather than pay for the required upgrades. It explains that this decision will depend on a number of factors, including how profitable the property currently is, the cost of improvements, the price the landlord could achieve if they sold, and their wider financial situation.
The document also refers to what happened under previous EPC rules. When minimum standards were introduced for properties rated F and G, the value of those homes fell by between £5,000 and £9,000 compared with similar properties that were not affected.
It suggests that a similar outcome could occur if higher minimum standards are enforced. Some landlords may decide that upgrading their property is worthwhile and remain in the market. Others, particularly those facing the highest costs, may conclude that selling the property is the cheaper option.
The consultation further recognises that some landlords could attempt to pass on the cost of improvements to tenants through higher rents. However, it also notes that tenants may accept higher rents if these are balanced by lower energy bills and warmer, more efficient homes.
Overall, while the government maintains that EPC C targets should not result in rent increases, its own analysis shows there is still a risk of landlords exiting the market or adjusting rents in response to the new requirements. The long-term impact will depend on how costly the changes prove to be and how landlords and tenants respond once the rules are fully implemented.
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