EPC Rating Changes 2025: Your Guide to Energy Efficiency Requirements for Rental Properties

As we move through 2025, energy efficiency requirements for rental properties are undergoing significant changes that every landlord needs to understand. At Berry Lettings, we're committed to helping property owners across the East Midlands navigate these evolving regulations and maintain compliant, profitable rental portfolios.

Whether you manage houses to rent in Derby or Nottingham, staying ahead of EPC requirements is crucial for your investment success. Let's explore what these changes mean for your properties and how to prepare effectively.

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What Are the Current EPC Requirements?

Under the Minimum Energy Efficiency Standards (MEES) regulations, all privately rented properties in England and Wales must maintain a minimum Energy Performance Certificate (EPC) rating of E. This requirement has been in place for new tenancies since 2018 and has been extended to all existing tenancies since 2020.

Since April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption. Properties failing to meet this standard face penalties of up to £5,000 per property.

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The Big Changes Coming by 2030

The landscape is set to change dramatically over the next five years. The government has announced plans to raise the minimum EPC rating for rental properties to C by 2030, and new tenancies will be required to meet this standard from 2028.

This significant shift affects approximately 52% of private rental properties currently rated below C. This proposal will aim to uplift 52% of private rented homes in England to a new EPC standard, saving tenants £240 per year (on average) on their energy bills.

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Key Timeline:

• 2026: New EPC assessment methodology introduced

• 2028: All new tenancies must achieve an EPC C rating

• 2030: All existing tenancies must achieve an EPC C rating

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What This Means for Your Investment Properties

These changes will significantly impact your rental business strategy if you work with a letting agent in Derby or search for a property manager near me. To meet the 2030 target, it's estimated that around 340,000 rental homes will need to make improvements each year to achieve a minimum EPC rating of C.

The financial implications are substantial. The estimated average investment needed per property is between £6,100 and £6,800. However, a proposed cost cap provides some protection for landlords.

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Cost Cap Protection

A maximum cost cap of £15,000 per property has been proposed. If a property cannot be brought up to EPC C within this limit, landlords can apply for a 10-year exemption. This provides crucial financial protection for property owners facing challenging upgrade scenarios.

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EPC System Overhaul in 2026

The government is planning a complete overhaul of how EPCs are calculated. From 2026, the government plans to update how energy performance in properties is measured and scored. These will be based on how properties retain heat rather than how much energy a property uses.

This change could significantly affect property ratings, with some properties seeing their ratings improve while others may decrease under the new methodology.

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Essential Improvements to Consider

Standard upgrades that can boost EPC ratings include:

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Insulation Upgrades

• Loft insulation improvements

• Cavity wall insulation

• Solid wall insulation (where applicable)

• Floor insulation

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Heating System Improvements

• Modern condensing boiler installation

• Air source heat pump systems

• Smart heating controls and thermostats

• Upgraded radiators and pipework

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Building Fabric Enhancements

• Double or triple glazing

• Improved draught-proofing

• Energy-efficient external doors

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Renewable Energy Solutions

• Solar panel installations

• Solar water heating systems

• Heat recovery ventilation systems

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Regional Considerations for East Midlands Properties

As a letting agent East Midlands specialist, Berry Lettings understands the unique challenges facing property owners in our region. Many properties in Derby and Nottingham are older Victorian or Edwardian buildings that may require more extensive work to achieve higher EPC ratings.

The National Residential Landlords Association (NRLA) points out that research in 2021 found that, in some areas of the North and the Midlands, the cost of EPC upgrades is about a quarter of property values.

This regional variation makes working with local experts who understand your area's challenges and opportunities essential.

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Government Support and Funding

The government recognises the financial burden these changes place on landlords and is introducing several support schemes:

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Warm Homes: Local Grant

Private rented sector landlords may receive one home fully funded per landlord under Warm Homes: Local Grant. The Warm Homes: Local Grant will fully fund upgrades for one property per landlord – any subsequent properties (the second to be upgraded and beyond) owned by the same landlord will require a 50% landlord cost contribution towards the total cost of works.

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Other Available Schemes

• Boiler Upgrade Scheme (BUS): Up to £7,500 grants for heat pump installations

• Great British Insulation Scheme

• Energy Company Obligation (ECO) schemes

• Green mortgages with preferential rates for energy-efficient properties

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Penalties for Non-Compliance

The consequences for failing to meet the new standards are significant. The maximum fine for non-compliance will be £30,000 per breach. Local authorities may have greater powers to name and shame non-compliant landlords via public disclosure.

This represents a substantial increase from the current maximum penalty of £5,000, emphasising the government's commitment to driving energy efficiency improvements across the rental sector.

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How Berry Lettings Can Help

As your trusted letting agent in Derby, Berry Lettings offers comprehensive Landlord Services to help you navigate these regulatory changes:

• Property Assessment Services : Our experienced team can evaluate your current EPC ratings and identify priority improvements that offer the best return on investment.

• Upgrade Planning and Management : We work with trusted local contractors to coordinate necessary improvements and ensure work is completed efficiently and cost-effectively.

• Compliance Monitoring : Our property management services include ongoing monitoring of EPC requirements and renewal schedules, ensuring your properties remain compliant.

• Tenant Relations : We handle all tenant communications regarding improvement works, minimising disruption and maintaining positive landlord-tenant relationships.

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Acting Now

The key to managing these changes successfully is early preparation. The government says it is "keen" to encourage landlords to act early, before the new EPC system is introduced in 2026. As an incentive, landlords who improve their properties to EPC C under the current system before the 2026 EPC reforms will be treated as compliant until their EPC expires.

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Immediate Steps to Take:

1. Assess Your Current Position: Obtain up-to-date EPC certificates for all your rental properties

2. Prioritise Your Portfolio: Focus on properties most likely to benefit from cost-effective improvements

3. Budget for Improvements: Start setting aside funds for necessary upgrades

4. Research Funding Options: Investigate available grants and support schemes

5. Plan Your Timeline: Develop a phased approach to improvements across your portfolio

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Conclusion

The EPC rating changes coming into effect by 2030 represent the most significant shift in rental property energy efficiency requirements in decades. While the financial implications are substantial, early preparation and strategic planning can help minimise costs and maximise benefits.

As your local letting agent and East Midlands specialist, Berry Lettings is here to support you through every aspect of these changes. From initial property assessments to coordinating improvement works and ongoing compliance, our comprehensive Landlord Services ensure your rental portfolio remains profitable and compliant.

Don't wait until the deadline approaches. Contact Berry Lettings today to discuss how we can help you prepare your properties for the future of energy-efficient rental housing. Together, we can ensure your investments thrive in the evolving regulatory landscape.

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