EPC C Requirement 2028: What Buy-to-Let Landlords Must Know

The UK government's proposal to raise the minimum EPC standard to C by 2028 represents the most significant regulatory intervention in the buy-to-let sector's history. With approximately 60% of rental properties currently below EPC C, this is not a marginal compliance adjustment—it is a fundamental restructuring of portfolio economics.

Critical numbers

2.7 million: Rental properties in England currently rated below EPC C
£15 billion: Estimated aggregate upgrade cost to meet EPC C across sector
£6,000-£12,000: Typical per-property upgrade cost from D to C
2028: Proposed implementation for new tenancies
2030: Proposed implementation for all existing tenancies

The regulatory timeline

While not yet enacted into law, the EPC C requirement is embedded in government energy efficiency policy and climate commitments. The consultation process has concluded, with implementation details expected in 2025 legislation.

Proposed implementation phases

2028: New tenancies

Phase 1

From 2028, landlords will be unable to grant new tenancies or renew existing tenancies on properties rated below EPC C. Existing tenancies with sitting tenants can continue until 2030 deadline.

2030: All tenancies

Phase 2

From 2030, all rental properties must meet EPC C, regardless of when the tenancy began. No transition period for existing tenancies. Properties below standard become unlettable.

Exemption cost cap increase

Expected

The current £3,500 cost cap for exemptions is expected to increase to £10,000. Landlords must spend the full cap on improvements before claiming exemption.

Policy certainty and risk assessment

While the exact timing may shift by 6-12 months, the policy direction is certain. The EPC C requirement is:

Embedded in the UK's Net Zero Strategy and carbon reduction commitments
Supported by cross-party consensus on energy efficiency policy
Aligned with fuel poverty reduction objectives
Consistent with housing quality standards trajectory

Landlords who delay action based on "it might not happen" are taking on significant execution risk. Professional investors are preparing now.

Market impact: Property values and lettability

The market is already pricing in EPC compliance risk. The differential between EPC C and EPC D properties has widened significantly since 2022.

Capital value divergence

EPC rating

Market discount

Investor behaviour

C or above

No discount

Full demand, premium pricing achievable

5-10%

Selective demand, upgrade costs deducted

10-15%

Limited demand, high execution risk

F or G

15-25%

Negligible investor demand, sell or refurbish

These discounts reflect not just upgrade costs, but also lettability risk, tenant quality concerns, and mortgage availability constraints.

Rental demand and void risk

Tenant preferences are shifting rapidly. Energy costs remain elevated, making efficiency a primary selection criterion:

Rental premium: EPC C properties achieve 5-8% higher rents than EPC D equivalents
Void periods: EPC C properties let 2-3 weeks faster than EPC D
Tenant quality: Professional tenants increasingly filter searches by EPC rating
Retention: Tenants stay longer in efficient properties (lower turnover costs)

From 2028, sub-EPC C properties will be entirely unlettable to new tenants, regardless of condition or location.

Assess your portfolio's compliance position

BTL.properties analyses every property's EPC compliance risk, upgrade path to EPC C, and impact on returns. Know your exposure before 2028.

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Financial impact on landlord returns

The EPC C requirement forces capital allocation decisions: upgrade, hold and accept reduced lettability, or dispose.

Return impact modeling: EPC D to C upgrade

Example scenario: £200,000 EPC D property, £1,200 PCM rent

Purchase price

£200,000

Upgrade cost (D→C)

£7,500

Total capital invested

£207,500

Effective price per £1

£1.0375

Net yield (before upgrade)

5.4%

Net yield (after upgrade)

5.2%

The upgrade erodes 20 basis points of yield. However, avoiding the upgrade means the property becomes unlettable in 2028, reducing yield to zero. The upgrade is mandatory for continued operation.

Decision framework: Upgrade vs dispose

Not all properties are economically viable to upgrade. Use this framework to categorize portfolio holdings:

Clear upgrade (hold)

Upgrade cost under £6,000, post-upgrade yield remains above 5%, strong rental demand area

Action: Upgrade before 2027 to avoid contractor capacity constraints

Marginal upgrade (case-by-case)

Upgrade cost £6,000-£10,000, post-upgrade yield 4.5-5%, moderate rental demand

Action: Compare upgrade cost to selling and redeploying capital into compliant property

Uneconomic upgrade (dispose)

Upgrade cost over £10,000, post-upgrade yield below 4.5%, or property requires major structural work

Action: Dispose before 2027 market flood, redeploy into compliant stock

Strategic preparation: Landlord action plan

Professional landlords are taking action now. Waiting until 2027 creates execution risk: contractor capacity constraints, panic selling pressure, and compressed timeframes.

2025-2026: Portfolio audit phase

Verify current EPC ratings: Check epcregister.com for all properties, obtain new assessments where EPCs are old
Obtain upgrade quotes: Get specific assessments for properties rated D or E, understand exact work required
Model financial impact: Calculate post-upgrade yields, compare to disposal and redeployment
Categorize holdings: Clear upgrade, marginal, or dispose based on economics

2026-2027: Execution phase

Dispose of uneconomic properties: Sell before market flood, avoid 2027-2028 distress pricing
Complete upgrades on viable properties: Secure contractor capacity early, complete work before 2028
Acquire compliant replacement stock: Use disposal proceeds to buy EPC C properties, avoid upgrade costs
Refinance if needed: Arrange finance for upgrade work before lender criteria tighten further

2028+: Compliance enforcement

All properties EPC C or exempt: No exceptions for new tenancies
Maintain compliance: Obtain new EPCs after upgrades, keep certificates current
Apply acquisition discipline: Only acquire EPC C properties, or discount sub-C by full upgrade cost plus margin

Market timing risk: Expect significant disposal volume in 2026-2027 as landlords with uneconomic properties exit the market. This will create temporary price pressure. Dispose early or hold through the cycle—do not sell into the panic.

Acquisition strategy in the EPC C era

From 2025 onwards, EPC rating should be the second criterion in acquisition decisions, after location.

Valuation framework by EPC rating

EPC C or above

PREFERRED

Pay market rate. No upgrade risk, full lettability, mortgage availability.

Valuation: Comparables, no discount

EPC D

CONDITIONAL

Acquire only if price + upgrade cost < EPC C comparable. Discount for execution risk.

Valuation: Comparables minus (upgrade cost × 1.2)

EPC E or below

AVOID

Generally avoid. Upgrade costs typically exceed 10% of property value. High execution risk.

Valuation: Only acquire if deep-value opportunity with professional refurbishment capability

This framework ensures you do not overpay for upgrade risk. Many sellers price EPC D properties at minor discounts that do not reflect true compliance costs.

Every property analysed for EPC compliance

BTL.properties automatically checks EPC ratings, calculates upgrade costs to reach EPC C, and adjusts offer prices for compliance risk. Stop overpaying for regulatory exposure.

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Exemptions under the 2028 regime

The exemption framework is expected to continue but with a higher cost cap and stricter enforcement.

Expected exemption criteria

Cost cap exemption: £10,000 cap (up from £3,500). Must demonstrate full expenditure on EPC improvements
Consent refusal: Required third-party consent (freeholder, planning, listed building) cannot be obtained
Devaluation: Improvements would reduce property value by more than 5%
Maximum exemption period: 5 years, after which reassessment required

Exemptions are not loopholes. They require formal registration, evidence of expenditure, and periodic renewal. Enforcement is increasing.

Frequently asked questions

Is the 2028 EPC C requirement definitely happening?

While not yet law, it is embedded in government energy policy and climate commitments. Exact timing may shift by 6-12 months, but the policy direction is certain. Prudent landlords are preparing now.

What happens to my tenancy if I don't upgrade by 2028?

Existing tenancies can continue until 2030. From 2028, you cannot grant new tenancies or renewals on sub-EPC C properties. From 2030, all properties must meet the standard regardless of tenancy start date.

Should I sell EPC D properties now or upgrade them?

Depends on upgrade economics. If upgrade cost is under £6,000 and post-upgrade yield remains above 5%, upgrade. If upgrade cost exceeds £10,000 or yield falls below 4.5%, consider disposal and redeployment into compliant stock.

Will there be government grants to help with upgrade costs?

Unlikely for landlords. Current schemes (ECO4, Great British Insulation Scheme) target owner-occupiers and low-income households. Landlords should assume full self-funding of upgrades.

Can I just claim the cost cap exemption instead of upgrading?

Only if you actually spend the full £10,000 cap on improvements and still cannot reach EPC C. This requires evidence and formal registration. It is not a blanket "too expensive" exemption.

How will this affect property prices?

EPC C properties will command premiums. EPC D properties already trade at 5-10% discount. Expect price divergence to widen as 2028 approaches, with potential panic selling of uneconomic properties in 2026-2027.