The government’s plan to require all new tenancies to achieve an EPC C rating by 2028 is pushing thousands of buy-to-let landlords towards the exit. A report by Property118 suggests that one in five landlords now plans to sell up rather than invest in costly energy improvements. The figure echoes data from the National Residential Landlords Association, which found that 21% of landlords intend to reduce their portfolio over the next year.
As reported by Property118, the trigger is the upfront cost, the lack of clarity on grants, and the short timeline. Landlords with properties rated EPC D or E face bills of £10,000 to £30,000 for insulation, double glazing, or heat pumps, sums that may never be recouped through rent.
Who qualifies, and who doesn’t
The 2028 target applies to all new tenancies in England and Wales. Existing tenancies have until 2030. Exemptions exist for listed buildings, properties where improvements would reduce the building’s value by more than 5%, and cases where the tenant refuses consent. But the bar is high: landlords must prove they have exhausted all cost-effective measures before claiming an exemption.
Ofgem data shows that just 38% of privately rented homes in England currently meet EPC C. The rest, roughly 2 million properties, need upgrades. For a typical 3-bed semi with cavity walls and a gas boiler, the Energy Saving Trust estimates that topping up loft insulation to 270mm costs £300 and saves £200 a year. But solid-wall insulation for a 1930s terrace can run to £8,000 and deliver only modest gains if the windows are single-glazed.
What it costs a typical 3-bed semi
Take a 3-bed semi in Manchester, currently rated EPC D. To reach C, the landlord needs loft insulation (£300), cavity wall insulation (£600), double glazing for three windows (£2,500), and a new gas boiler with smart controls (£2,200). Total: £5,600. If the property has solid walls, the bill jumps to £12,000. The government’s Boiler Upgrade Scheme offers £7,500 for a heat pump, but that replaces only one element, and heat pumps require good insulation to work efficiently.
The catch is that many landlords cannot pass these costs to tenants. The rent cap in the Renters’ Rights Bill limits annual increases to the Consumer Price Index plus 1.5%. For a property earning £1,000 a month, that means a maximum rise of £15 in 2025, barely a fraction of the upgrade cost.
What this means for buyers and tenants
For first-time buyers, the sell-off could be a rare opportunity. Properties needing EPC upgrades are often priced 10-15% below market average, according to Zoopla data. A £200,000 house that needs £10,000 of work might sell for £175,000. The buyer then controls the upgrade timeline and can apply for the Great British Insulation Scheme or the ECO4 grant, which covers 100% of costs for low-income households.
Tenants face a bleaker picture. Fewer rental properties means higher competition and rising rents. The Office for National Statistics reports that private rents in the UK rose 9.1% in the year to August 2024. A shrinking supply will only accelerate that trend. The government’s own impact assessment, published in March, acknowledged that the EPC C policy could reduce the private rental stock by 5-7% by 2028.
What to do now
If you are a landlord, start with a free EPC assessment from a registered assessor. Compare quotes from at least three installers for insulation and heating. Check if your property qualifies for the Boiler Upgrade Scheme or the ECO4 grant. If you plan to sell, get an EPC done now, a D or E rating will push buyers away, while a C or above could command a premium.
If you are a tenant, check your property’s EPC on the government register. If it is below C, ask your landlord about planned upgrades. You have the right to request energy efficiency improvements under the Energy Efficiency (Private Rented Property) Regulations. If the landlord refuses, you can complain to the local authority.
If you are a buyer, look for properties with EPC D or E. The discount is real, and the grants are available. But get a full building survey first, solid walls, single glazing, and old boilers are manageable, but structural issues are not.
Frequently Asked Questions
Yes, from 2028 all new tenancies must have an EPC rating of C or above. Landlords who fail to comply can face fines of up to £30,000 per property. Exemptions exist for listed buildings and where improvements would devalue the property by more than 5%.
Yes. The Boiler Upgrade Scheme offers £7,500 for heat pumps. The Great British Insulation Scheme covers loft and cavity wall insulation. ECO4 grants are available for low-income households. Landlords should check eligibility via the Energy Saving Trust website.
