New EPC cash for landlords – but will yours qualify?

The government has announced a new funding package for landlords in England to improve the EPCs of their rented homes. The Warm Homes: Local Grant will cover upgrades such as insulation and low-carbon heating.  

Private landlords can receive up to £30,000 to upgrade one rental home, and up to £15,000 for subsequent homes subject to a minimum 50% cost contribution from the landlord.    

That’s enough to make a big difference to landlords. Earlier this year, a report by Reapit estimated that it would cost landlords an average of £10,442 to bring their properties up to an EPC C rating. A landlord with a single rented property could therefore have their costs fully covered by the grant.

There is no limit on the number of homes that a landlord can claim the grant for. However, the Warm Homes: Local Grant counts as a subsidy under the Subsidy Control Act (2022). This means that landlords cannot receive more than £315,000 in subsidies over the current and previous two financial years, imposing an effective cap on how many properties can be upgraded.

Who is eligible?  

The grant will be available for existing homes (i.e., not new builds that have not been previously occupied) with an EPC rating of D to G. However, privately rented homes rated F or G must have a registered exemption from achieving the minimum EPC E under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to receive funding.

Media reports have suggested that not many landlords will be able to get the grant due to the tough requirements to qualify, but the criteria may not be as strict as they look. Households qualify if they fall into any of these categories:

• Living in a postcode that falls into the two most deprived deciles on the government’s Index of Multiple Deprivation. The Department for Energy Security and Net Zero has published a full list of qualifying postcodes.

• The household receives certain means-tested benefits, including Universal Credit, Housing Benefit, Pension Credit or Income-based Jobseeker’s Allowance, or otherwise qualifies through ECO4 Flex Route 2, which covers some people on low incomes who do not receive the relevant benefits.

• The household has a pre-tax income of less than £36,000, or an After Housing Costs net income under a specified amount depending on the number of dependents in the household. This will include a lot of families: two adults and two children will qualify if they have a household income of under £28,000 after tax and rent.

A chance to help your landlords

The government has announced that all privately rented properties will have to reach an EPC rating of C by 2030. According to Reapit’s research, less than half of PRS homes currently reach that level – giving landlords a choice between paying for upgrades or selling up at a time when many others are already quitting the market. The report further estimated that around 880,000 PRS homes could be lost.

But if they qualify for this grant, small BTL investors and accidental landlords could bring their properties up to EPC C without spending a penny. By helping them understand the support on offer, you could keep vital rental stock in the PRS – and in your lettings portfolio.

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