Labour relax deadlines and spending caps for Energy Performance Certificate targets

Labour have simplified the deadline for landlords to improve the grades on their Energy Performance Certificates (EPC) and reduced spending caps.

Previously, Labour had set a multi-stage deadline for different tenancy types to reach an EPC grade of ‘C’ or above. 

However, this has been streamlined into one universal deadline for all tenancy types to meet grade ‘C’ or higher by 2030.

Goodbye to the staggered deadline

Labour had originally stipulated that they wanted new tenancies to meet the EPC target by an earlier deadline of 2028.

Now, landlords of all private rental sector (PRS) properties, including those with established tenancies, will have to bring their buildings up to a higher level of energy efficiency by 2030 (if they haven’t already done this).

Investment cap decreased

In more positive news, Labour have announced a change to the planned cap on how much landlords will be expected to invest in order to meet the upcoming EPC standards. 

This cap, which is the maximum amount of money that landlords would be expected to spend on improvement works, has been reduced from £15,000 to £10,000.

In addition, if a landlord has been conducting improvement works since October 2025, any expenses will be included within the spending cap. 

Previously, there were concerns that excluding historic spending would create an incentive for landlords to delay energy efficiency works until the regulations came into force. By counting spending from October 2025 and onwards, this risk has largely been removed.

For landlords of properties with significant structural constraints that make achieving an EPC ‘C’ more challenging, the £10,000 cap may be reached quickly — after which no further spending would be required under the regulations.

Boiler Upgrade Scheme funding

The push towards renewable heating sources has been a big part of Labour’s drive to improve warmth and energy efficiency in all UK homes. 

The government aims to phase out boilers powered by fossil fuels, such as oil, propane and natural gases.

As such, the government has pledged £2.7 billion to the Boiler Upgrade Scheme. Landlords can use this capital grant scheme to fund installation of renewable air- and ground-source heat pumps.

Not all properties can equally benefit from heat pump installation. Ground-source heat pumps only work for properties with surrounding earth for the pipework to be laid in, and the electricity needed to run air-source pumps can be more expensive than gas bills. 

However, installing heat pumps can increase a property’s energy efficiency, and the Boiler Upgrade Scheme is designed to encourage landlords to invest in them.

NRLA approval

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), responded positively to these announcements, labelling them a “victory for common sense”.

The NRLA have publicly clashed with the government over policies affecting the PRS, from “unrealistic” EPC targets to the Renters’ Rights Act. 

Beadle attributes Labour’s recent compromises to the organisation’s campaigning for a “sensible, pragmatic plan”:

Don’t get me wrong, the new plans are not perfect, but this does demonstrate that our lobbying has worked and that the Government has listened, recognising the potentially devastating consequences of hundreds of thousands of homes being taken off the market for failing to meet the 2028 deadline.

However, Beadle has maintained a realistic outlook about the scale of Labour’s ambitions for the PRS, since there are so many properties in need of upgrades and not enough tradespeople available to help landlords:

There is, however, still a mammoth task ahead. There are currently 2.5 million rental homes in England that will require improvements to meet EPC C or above – and a shortfall of skilled tradespeople that is estimated to reach a quarter of a million by 2030.

While the NRLA have taken these announcements as a win for landlords, other voices in the industry may argue that Labour did not go far enough with the deadline compromise. 

For example, back in May 2025, specialist lender Paragon Bank proposed a more lenient, staggered deadline, with every PRS property having to conform to the new EPC targets by 2035. 

Nonetheless, Labour’s willingness to reach concessions on this is a step in the right direction.

Since Labour have scaled back several of their intended policies, time will tell if the EPC plan will receive further adjustments.