Energy Performance Reform: What it means for landlords and tenants

The Government’s recent response makes clear that the current minimum is no longer considered sufficient. Energy Performance Certificates (EPCs) are being redesigned to provide more detailed and meaningful information, and future minimum energy efficiency standards are expected to be more demanding.

Government policy proposals indicate an intention for rented property to meet a minimum EPC rating of C by around 2030 subject to further legislation.

While a number of technical changes are proposed, the clear message is that the minimum acceptable EPC rating is moving on from ‘E’ to ‘C’. Although this is not law yet, it is something landlords and tenants should already be thinking about.

From E to C: what’s actually changing?

At present, rented property must meet a minimum EPC rating of E to be lawfully let. That benchmark has been in place for some time and, for many buildings, meeting it required relatively limited work.

The Government’s response makes clear that this is no longer considered sufficient. EPCs are being redesigned to provide more detailed and meaningful information, and future minimum standards are expected to be more demanding, with a C rating emerging as the new target.

What does this mean for landlords?

For landlords, particularly those with older or secondary stock, the shift towards a C rating could be significant.

Achieving a C rating often involves more than cosmetic upgrades. It may require investment in insulation, heating systems, lighting, control or other energy efficiency measures. Properties that cannot be realistically improved may become harder to let or sell in the future.

This also has wider implications:

• EPC ratings may increasingly affect asset value;
• Lenders and investors will pay closer attention to energy performance; and
• Tenants will become more aware of running costs and sustainability.

Even before any formal deadline is introduced, the market may start to treat a sub-C rating as a drawback.

What does this mean for tenants?

Tenants may assume EPC compliance is purely a landlord issue, but that is not always the case.

As standards tighten, leases are more likely to include provisions dealing with energy performance, access for improvements works, data sharing and compliance with future regulations. Tenants may also benefit from lower energy costs in better-rated buildings but may face disruption where upgrade works are needed during the term of their lease.

Understanding a building’s EPC position at the outset is therefore becoming increasingly important.

Why the wider EPC changes matter

Alongside the focus on ratings, the Government is proposing changes to when EPCs are required, what they measure and how reliable they are. The intention is to make EPCs something people can genuinely rely on when making property decisions.

The move towards a minimum EPC C rating is not just a regulatory tweak. It is going to be a shift that affects how property is valued, let and occupied. While the detail is still being consulted on, the direction is clear.

Commercial Property experts

If you are a landlord or tenant, now is the time to understand where your property sits and what a future move to a C rating could mean. Get in touch with our expert Commercial Property team if you would like to discuss how these changes might affect a particular property or lease.

About the author

Howard Hasan

Howard Hasan is a Solicitor in our Commercial Property team and is based in our Ringwood office.

He advises on all key aspects of commercial property work, including buying and selling premises, negotiating leases, handling renewals and licences, supporting corporate transactions, and acting for both lenders and borrowers on property finance.

Howard combines strong technical ability with a practical, client‑focused approach, and is also Vice President of the Bournemouth & District Junior Lawyers Division.