EPC C by 2030: What the January Consultation Means for Your Portfolio

On 21 January 2026, the government confirmed what property investors have been waiting on: all private rental properties in England and Wales must achieve a minimum EPC C rating by 1 October 2030. Simultaneously, a consultation on an entirely new energy performance measurement system — the Home Energy Model — opened, with responses due by 18 March 2026. For landlords and investors managing residential portfolios, this is a defining policy moment that demands immediate attention.

The Scale of the Problem

The headline number investors need to understand is this: 52% of private rented sector properties currently sit below EPC C. That translates to an estimated 2.5 to 2.9 million properties across England and Wales requiring upgrades before the 2030 deadline. The average cost of compliance is estimated at £6,864 per dwelling, though the government has set a cost cap of £10,000 per property — down from the £15,000 figure that had been floated. Critically, any spending on qualifying energy improvements from 1 October 2025 onwards already counts toward that £10,000 cap, giving investors who act now a meaningful head start.

The financial consequences of non-compliance are severe. Fines have been set at up to £30,000 per non-compliant property — a sixfold increase from the old £5,000 maximum. For an investor holding five properties, a failure to comply across the portfolio could carry a potential £150,000 penalty exposure. These are not figures that can be absorbed as a cost of business.

A New Rating System Is Coming

The January consultation does not just confirm the 2030 deadline — it signals the replacement of the existing A-G EPC rating system with a fundamentally different framework. From late 2026, the Home Energy Model will begin operating alongside the current Standard Assessment Procedure (SAP), before fully replacing it on 1 October 2029. The new system assesses properties across four headline metrics: fabric performance (insulation and glazing quality), heating system efficiency, smart readiness (capacity for smart energy technology), and estimated annual energy cost.

Under the new framework, landlords will not simply need to hit a single band. To achieve compliance, properties must meet the fabric performance standard and then satisfy either the heating system or smart readiness threshold. This tiered approach gives investors some flexibility in how they prioritise upgrades, but it also means that a property's current EPC C rating is not necessarily a guarantee of compliance once the new metrics apply from 2029 onwards. Investors who are banking on existing ratings should seek reassessment before that transition.

There is one significant concession worth noting: the January announcement includes a grandparenting clause. Properties that achieve EPC C before 1 October 2029 under the current SAP methodology will be treated as compliant until that EPC expires or is replaced. This gives investors a narrow window to lock in compliance under the more familiar existing system before the new metrics take effect.

What This Means for Investors

The most immediate implication is one of acquisition pricing. Properties rated D, E, F, or G — which historically traded at a discount — now carry a clearly quantifiable remediation cost: up to £10,000 per unit, plus the compliance risk premium of £30,000 per property in potential fines. Any purchase of sub-C stock needs to factor in those costs before yield calculations are meaningful. At the same time, the sheer volume of upgrades required across the market means contractor availability is likely to tighten considerably as 2030 approaches. Investors who defer action until 2028 or 2029 face the prospect of inflated retrofit costs and constrained access to qualified tradespeople.

For those holding HMOs, short-term lets, or listed buildings, the January update flagged that clearer guidance on exemptions and scope is forthcoming — particularly relevant given that these property types carry specific constraints on the extent of energy improvements that can be made. Registered exemptions remain available where all reasonable improvements have been exhausted or where works would devalue the property, but the burden of documentation is on the landlord to evidence and maintain these exemptions through the PRS Exemptions Register.

On the financing side, the government's £5 billion Warm Homes Fund includes loans and grants for eligible properties, and the Warm Homes Local Grant can provide up to £15,000 for properties rated D to G. Qualifying energy efficiency investments also carry tax deductibility. These mechanisms reduce the net cost of compliance, but they require proactive engagement — funding availability is not guaranteed to remain in place throughout the transition period.

Acting Before the Rush

The consultation closing date of 18 March 2026 is the next inflection point. Once the government publishes its response, the new metric boundaries and scoring methodology will be clearer, giving investors the data they need to model compliance costs across their portfolios with precision. Until then, the prudent move is to commission current EPC assessments on any sub-C properties, begin scoping retrofit works, and engage with the Warm Homes funding routes now rather than when demand for them peaks.

The 2030 deadline may feel distant, but with over 2.5 million properties needing upgrades, a compressed timeline, a new rating system arriving in 2029, and fines of up to £30,000 per property for those who miss it, the investors who treat this as a 2026 problem will be far better positioned than those who treat it as a 2029 one.