Data for the year to June 2026 shows that 40.2% of homes assessed in England and Wales fall below the Energy Performance Certificate band C. This means a significant portion of the private rented sector requires energy efficiency improvements to meet the government’s 2030 target. The estimated cost to landlords for these upgrades stands at £9.9 billion, with an average expense of around £5,387 per property, capped at £10,000.
From an investment perspective, this presents a substantial financial challenge for landlords, especially those with multiple properties. The scale of the required outlay could impact rental yields and influence decisions on portfolio management. Landlords may need to factor these costs into future rent reviews or consider passing some expenses onto tenants, although market conditions will dictate how feasible that is.
For investors, the data suggests a growing premium on properties already meeting or exceeding EPC band C. Homes with higher energy efficiency ratings are likely to attract stronger tenant demand and potentially command higher rents. Conversely, properties below band C could face increased void periods or depreciation if landlords delay upgrades.
Tracking EPC ratings and associated costs is becoming vital for accurate portfolio valuation and risk assessment. The £9.9 billion figure highlights the scale of capital expenditure required, but also signals opportunities for investors who prioritise energy-efficient assets in their acquisition strategies.
Source: Property118
