How to Meet the New Energy Efficiency Standards Without Breaking the Bank

Energy efficiency has become a top priority for landlords across the UK, with new regulations on the horizon. By 2030, all rental properties must meet a minimum Energy Performance Certificate (EPC) rating of Band C. While the goal is to create more sustainable homes, many landlords are concerned about the cost of upgrading their properties to meet these new standards.

In the North West, over 60% of landlords have at least one property that does not yet meet the required standard. With rising energy costs and increased regulation, it’s understandable that landlords are cautious about how much they’ll need to invest to comply. However, with some smart strategies and government support, it’s possible to meet these standards without breaking the bank.

Why Are the New EPC Standards Being Introduced?

The government’s push for higher energy efficiency in the rental sector is part of its broader strategy to tackle climate change. These standards aim to:

• Reduce carbon emissions by making homes more energy efficient.
• Lower energy bills for tenants, many of whom are struggling with rising living costs.
• Improve the quality of housing in the private rented sector, ensuring that properties are comfortable and affordable to run.

While these goals are important, the responsibility of implementing these changes falls squarely on landlords. For many, the question is: How much will this cost, and is there any way to reduce that burden?

The Cost of Compliance: What to Expect

According to the Goodlord State of the Lettings Industry Report, many landlords are facing significant costs to upgrade their properties. Nationally, over 52% of landlords have said that rising energy standards could even push them out of the market . However, in the North West, where house prices are generally lower than in regions like London or the South East, landlords may find that they are in a better position to invest in energy efficiency improvements.

On average, the cost of bringing a property up to EPC Band C can range from £2,000 to £10,000, depending on the property’s current rating and condition. While this can be a hefty investment, there are several ways to minimize these costs and ensure long-term savings.

How to Upgrade Your Property Without Overspending

Here are some practical ways to meet the new EPC standards while keeping costs manageable:

1. Start with a Professional Energy Audit - Before jumping into any upgrades, it’s important to understand where your property stands. A professional energy audit can identify the most cost-effective improvements, such as better insulation, more efficient heating systems, or energy-saving windows. This will help you prioritise where to invest, ensuring you get the most value for your money.
2. Take Advantage of Government Grants and Loans - The UK government has introduced various schemes to help landlords meet these new energy efficiency requirements. For example, there are grants and low-interest loans available specifically for upgrading insulation, installing energy-efficient boilers, and even fitting solar panels. Check what’s available in Manchester and the broader North West region through your local council or the national ECO4 scheme.
3. Focus on Low-Cost, High-Impact Improvements - Some of the most effective energy upgrades are also the simplest. These improvements may not get your property to Band C alone, but they can make a big difference for a modest investment. For instance:
   1. Improved insulation: Loft and cavity wall insulation can drastically improve your property’s energy efficiency for relatively low upfront costs.
   2. Energy-efficient lighting: Swapping out old bulbs for LED lights can reduce energy consumption immediately.
   3. Draught-proofing: Sealing gaps around windows, doors, and floorboards can reduce heat loss without major structural changes.
4. Consider Solar Panels or Heat Pumps - While more expensive upfront, technologies like solar panels or heat pumps can significantly reduce long-term energy costs and improve your EPC rating. With solar panels, you could even sell surplus energy back to the grid, helping offset the initial investment. Government incentives are often available for these larger projects, making them more accessible for landlords willing to invest for the long term.
5. Plan Gradually - If upgrading all your properties at once feels overwhelming, plan the work in stages. Focus on improving the properties that are closest to meeting the EPC Band C requirements first. Spreading the costs over time can make the financial impact more manageable while ensuring you’re working towards compliance.

Long-Term Benefits of Energy Efficiency

Investing in energy efficiency not only helps you comply with the regulations but can also have long-term benefits for your rental portfolio:

• Higher property value: Energy-efficient homes are more attractive to tenants and buyers, which can increase the value of your properties over time.
• Lower tenant turnover: Tenants are more likely to stay in a property with lower energy bills, which can reduce your vacancy rates.
• Future-proofing your investment: By making your properties more sustainable now, you’ll be prepared for future regulations, avoiding costly last-minute upgrades.

What Happens If You Don’t Comply?

Failing to meet the new EPC standards by 2030 could result in fines and limit your ability to rent out properties. Properties with a low EPC rating could also become less desirable to tenants, especially as awareness of energy efficiency grows. Staying ahead of the regulations now will save you from rushing to make upgrades under pressure later.

Conclusion: Upgrading Your Property Without Breaking the Bank

Meeting the new energy efficiency standards doesn’t have to be an overwhelming or overly expensive process. By taking advantage of grants, focusing on high-impact improvements, and planning strategically, you can bring your properties up to the required standard while maintaining your profitability.

If you’d like more advice on energy-efficient upgrades or want to discuss your property portfolio, feel free to reach out. We can help you plan a cost-effective strategy to meet these new regulations and ensure your rental properties are ready for the future.

Source of Data:

The statistics and insights mentioned in this article are based on findings from Goodlord’s State of the Lettings Industry Report 2024, with a focus on energy efficiency standards and the challenges facing landlords in the North West.