EPC 2030: Why today's five-year fixes demand a conversation now

At a panel discussion last month I was asked about the proposed changes to EPC requirements for privately rented properties, and one of the points I made was that advisers and landlords need to stop thinking about 2030 as some distant date.

That’s because the government's proposed requirement for privately rented properties to achieve an EPC rating of C, or qualify for an exemption, by 1st October 2030 is particularly relevant to the mortgage decisions being made today.

Consider a landlord refinancing onto a five-year fixed-rate mortgage in late 2026/early 2027, whose product will not expire until 2031/32. That landlord could pass the proposed EPC deadline without another natural refinancing opportunity, potentially leaving them needing to fund property improvements while still tied into their existing mortgage.

This is why EPC discussions should be taking place now, as part of the refinancing process, rather than being left until the deadline is considerably closer.

Understanding the financial implications

For advisers, the starting point should be understanding the EPC position of the properties their landlord clients own, particularly those currently rated D or E, and whether improvements might be required.

Landlords may have several properties needing work, with costs varying considerably depending on the age, condition and construction of each building, and the measures required to improve its energy efficiency.

Those costs could become significant across a larger portfolio, particularly when landlords are already managing higher mortgage payments, maintenance expenditure and other regulatory requirements.

If a landlord expects to need additional funds for improvements, there is a clear argument for discussing those requirements before arranging their next mortgage, rather than discovering later that further borrowing may be necessary.

This does not mean every landlord should immediately raise additional capital, but advisers should be helping clients understand their options and the potential implications of fixing their borrowing beyond 2030. The Warm Homes Plan and support for landlords.

There is also the question of what financial support might be available to landlords undertaking energy efficiency improvements, perhaps through the government's recently-announced Warm Homes Plan and its associated schemes.

The existing Warm Homes: Local Grant provides funding for eligible privately rented properties in England, with eligibility linked to the property's energy performance and the circumstances of the tenants living there. Under the scheme, private landlords can receive fully-funded improvements for one qualifying property, meaning there may be opportunities to reduce the financial burden of improvements across a portfolio.

However, the October Budget also announced a £1bn reduction in capital grant funding for the Warm Homes Plan, although the government confirmed that the majority of funding directed towards low-income households and social housing would be protected, alongside continued support for the Boiler Upgrade Scheme and the launch of the Warm Homes Loan Scheme.

This makes it particularly important for landlords to investigate what assistance (if any) is available, rather than assuming funding will necessarily be accessible when they decide to undertake improvements.

There are clear benefits for tenants too, with better-insulated and more energy-efficient properties potentially delivering warmer homes, lower heating costs and improved living conditions, while landlords can benefit from properties that are better prepared for future regulatory requirements.

Why acting before the EPC changes could pay

There is another important consideration which I believe deserves much greater attention, and that is the planned overhaul of the EPC assessment system itself. The government intends to introduce a new approach to assessing energy performance, with greater emphasis on the fabric of the building, alongside heating systems and other energy efficiency measures.

This means the way properties are assessed in future will differ from the current system, potentially changing which improvements are needed to achieve the required standard. Crucially, the proposed transitional arrangements recognise qualifying EPCs with an existing Energy Efficiency Rating of C or above, obtained before 1st October 2029, for the remaining validity of those certificates.

Given that EPCs normally remain valid for ten years, this creates a potentially valuable opportunity for landlords whose properties already achieve a C rating, or which could reach that standard through relatively modest improvements. For example, a landlord with a property currently rated high D might find that improving insulation or carrying out other suitable work allows them to achieve a C under the existing assessment system.

Obtaining a qualifying EPC before the transitional cut-off could then provide certainty for the remaining life of that certificate, rather than leaving the landlord to meet the requirements of a different assessment regime.

That does not necessarily mean achieving a C under the new system will be harder or more expensive, because the final details will determine the position for individual properties. However, there is a strong case for landlords understanding what they can achieve under the current system before it changes.

The adviser conversation starts today

Advisers are not expected to be EPC assessors or energy efficiency specialists, but they are well placed to raise these issues when discussing mortgage requirements and future borrowing plans.

At Fleet, we understand professional landlords need to consider their borrowing alongside the wider financial demands of owning and managing rental properties, particularly when those requirements may change during a mortgage term.

The message I wanted to get across at last month’s panel was that 2030 is the proposed finish line for compliance, not the starting point for planning, and that distinction matters enormously when landlords are making five-year borrowing decisions today.

For advisers, asking about EPC ratings, improvement plans and potential funding requirements now could make a meaningful difference to the financial decisions their landlord clients make over the coming years.