The government’s revived plan to mandate all private rented homes in the UK achieve an EPC (Energy Performance Certificate) rating of C or above by 2030 faces significant challenges, according to a recent analysis by Hamptons Lettings Agency.

While the Conservatives initially scrapped these plans in 2023, Energy Security and Net Zero minister Ed Miliband has announced the reinstatement of this goal. However, achieving this target presents a particular problem for older, lower-cost homes, especially those in the North of England. Hamptons suggests that many such homes, due to their construction and value, will find it unviable or impossible to meet EPC C standards.

Interestingly, properties with lower EPC ratings currently generate higher rental yields:

• EPC E rated homes achieve the highest yield at 7.9%.
• EPC D rated homes follow closely with 7.6%.
• In contrast, newer homes with an EPC A rating tend to yield just 5.5%.

For landlords, the cost of upgrading homes to meet the EPC C requirement will likely hit a spending cap before the energy efficiency target is reached. For tenants, the financial benefits of an upgrade are substantial, especially given the rising energy prices:

• Upgrading a home from EPC D to C could save tenants an average of £499 per year on energy bills—a 76% increase since 2019.
• Tenants in EPC E homes could save £1,248 per year, representing an 83% increase in savings.

Despite these potential benefits, Hamptons estimates that bringing all private rental homes up to EPC C will take 18 years, extending 12 years beyond the 2030 target, which underscores the difficulty of achieving the government’s ambitions.