UK landlords are facing an enormous financial challenge, with a £24 billion price tag looming as they work to meet the government’s new Energy Performance Certificate (EPC) standards by 2030. According to research by property technology firm Reapit, approximately 2.7 million rental properties across Great Britain will require retrofitting to meet the EPC standard C target, which aims to reduce the carbon emissions from housing.

The average cost of these upgrades is estimated to be more than £10,000 per property, leaving landlords grappling with how to finance these improvements. Steve Richmond, General Manager at Reapit, emphasized the gravity of the situation, acknowledging the importance of addressing greenhouse gas emissions but also warning that the cost could threaten the stability of the rental market if not handled properly.

The new EPC target, announced by Ed Miliband, Secretary of State for Energy Security and Net Zero, requires landlords to improve their properties to meet a C rating by 2030. This follows the cancellation of a similar policy in 2023, which had exemptions and cost caps that are absent in the current proposal, creating uncertainty around landlords’ obligations and available support.

Financial constraints are already limiting improvements. A survey by Energy UK found that 35% of respondents did not undertake energy efficiency upgrades in 2023 due to a lack of funds. This highlights the urgent need for government assistance to ensure landlords can meet these new requirements without destabilizing the private rented sector (PRS).

Neil Cobbold, Commercial Director at Reapit & PayProp, pointed out that property agents will play a crucial role in helping landlords navigate these changes. He also noted opportunities for agents to foster relationships with tradespeople to expedite retrofitting efforts, while also helping landlords minimize losses due to property vacancies during renovations.

As landlords, tenants, agents, and policymakers confront this challenge, collaboration and clarity from the government will be key. The coming months are critical in determining how the sector can retrofit millions of homes without causing significant disruptions to tenants or diminishing the supply of rental properties.