EPC Changes for Private Landlords: What’s Coming and What Does HEM Mean?

There have been plenty of headlines about landlords needing to achieve an EPC C, changes to Energy Performance Certificates and a completely new assessment method called the Home Energy Model. The proposals have changed several times, making it difficult for landlords to know what is actually happening and when they need to take action.

Here is the position as it stands in August 2026. It’s important to understand that although the government has confirmed its intended policy, some of the changes still require new regulations and parliamentary approval.

What Are the Current EPC Rules for Landlords?

For now, the existing Minimum Energy Efficiency Standards still apply.

Most privately rented homes in England and Wales must have an EPC rating of E or above, unless the property has a valid registered exemption.

The current rules have not yet changed to EPC C.

Under the existing regulations, landlords are generally expected to spend up to £3,500, including VAT, on relevant improvements to bring an F- or G-rated property up to an E. Where this cannot be achieved within the cost cap, an exemption may be available.

What Is Changing in 2030?

The government has confirmed its intention to introduce a higher energy-efficiency standard for privately rented homes. The planned compliance date is:

1 October 2030

The new standard is intended to apply to qualifying private rented properties on both new and existing tenancies. An earlier deadline for new tenancies is no longer planned. Instead, there will be one compliance date for properties within the scope of the regulations.

However, this will not be as simple as every property needing a C on the single rating currently displayed on an EPC.

New EPCs Will Have Four Headline Metrics

Domestic EPCs currently provide one main Energy Efficiency Rating, calculated largely around estimated energy costs.

Under the planned reforms, this will be replaced by four separate headline metrics:

• Energy cost

• Fabric performance

• Heating system

• Smart readiness

The EPC is therefore expected to provide a broader picture of how a home performs.

Energy Cost

This will show the property’s modelled energy costs under standardised occupancy and heating assumptions. It will not be based on the tenant’s actual bills, as energy use varies depending on the occupants and their lifestyle.

Fabric Performance

This will assess how effectively the building retains heat.

Features such as wall, floor and roof insulation, windows, doors and the overall construction of the property will influence this metric.

Heating System

This will look at the efficiency and environmental performance of the property’s heating.

The government wants future EPCs to provide clearer information about the move towards low-carbon heating.

Smart Readiness

This is expected to assess whether the property can use energy intelligently and respond to the changing energy system.

It could take account of features such as smart meters, solar panels, battery storage, smart heating controls, thermal storage and smart electric-vehicle charging.

The final calculations and banding arrangements are still being developed.

What Standard Will Private Landlords Need to Meet?

The government intends to introduce a two-part standard for privately rented homes.

By 1 October 2030, a qualifying property will generally need to achieve:

• A C against the fabric performance metric; and

• A C against either the heating system metric or the smart-readiness metric

This means fabric performance will be the primary requirement.

After meeting the fabric standard, landlords will have some flexibility over the second part. Depending on the property, they may be able to meet either the heating-system requirement or the smart-readiness requirement.

The exact improvements needed will vary between properties. A measure that works well for a modern flat may not be appropriate for a Victorian terrace or a rural cottage.

What Is the Home Energy Model?

The Home Energy Model, usually shortened to HEM, is a new methodology being developed by the government.

HEM is intended to replace SAP. For existing homes, the government is developing a modular version of HEM that would perform the role currently carried out by RdSAP.

HEM is designed to model a home’s energy use in greater detail and better reflect modern technology, including:

• Heat pumps

• Solar panels

• Battery storage

• Smart controls

• Time-of-use electricity tariffs

• Demand flexibility

• Other low-carbon technologies

For existing homes, the modular assessment method would allow information gathered during an on-site assessment to be entered into HEM.

When Will HEM and the New EPCs Arrive?

HEM was originally expected to arrive alongside the Future Homes Standard, but its introduction was delayed to allow further testing and assurance.

SAP 10.3 is currently the approved methodology for new dwellings in England.

The government plans to introduce HEM for Future Homes Standard compliance alongside SAP 10.3 before it eventually becomes the sole methodology.

The separate reform of domestic EPCs, including the use of HEM for existing homes, is currently planned for the second half of 2027. The exact launch date and transition arrangements still need to be finalised.

Until the new EPC system is introduced, existing homes will continue to be assessed using RdSAP 10.

What Happens if a Rental Property Already Has an EPC C?

This is particularly important for landlords whose properties already achieve a C.

Under the government’s planned transitional arrangements, a private rented property that achieves a C or above on the existing Energy Efficiency Rating before 1 October 2029 will be treated as compliant with the future standard until that EPC expires or is replaced.

Existing and reformed EPCs are expected to retain a 10-year validity period.

This means an EPC C obtained under the current system could remain useful during the transition, although the precise effect will depend on when the certificate was lodged and when it expires.

Landlords should be careful about replacing a qualifying certificate unnecessarily once the new system arrives because the transitional protection is expected to last only until that EPC expires or is replaced.

What if the Property Is Below a C?

Landlords whose properties do not achieve an EPC C before 1 October 2029 are expected to follow the new system.

The planned process is:

1. Obtain a new-style EPC showing the four new metrics.

2. Use its recommendations to identify suitable improvements.

3. Complete the relevant work.

4. Obtain another EPC after the improvements to demonstrate compliance.

The government intends to allow reasonable EPC assessment costs to count towards the future cost cap, although the detailed rules will be set out in legislation and guidance.

How Much Could Landlords Be Required to Spend?

The planned maximum required investment is £10,000 per property over a 10-year period.

This is a maximum rather than a standard charge. A landlord would not be expected to spend the full amount if the property can meet the required standard for less.

The government’s impact assessment estimates that the average spend for properties requiring improvements could be approximately £5,400.

If the property still cannot meet the standard after the landlord has reached the applicable cost cap, an exemption may be available.

For properties valued below £100,000, the government also intends to introduce a property-value adjustment. The maximum required investment would be the lower of:

• £10,000; or

• 10% of the property’s value

These arrangements have been confirmed as government policy but still need to be placed into legislation.

Can Work Completed Now Count Towards the Cost Cap?

Potentially, yes.

The government intends to recognise qualifying expenditure on relevant energy-efficiency measures installed from 1 October 2025.

Between 1 October 2025 and 30 September 2029, spending on measures recommended by an existing RdSAP EPC is expected to count towards the future cost cap. However, spending on the installation of fossil-fuel heating will not count.

Landlords should retain:

• EPC reports

• Recommendations

• Quotations

• Invoices

• Receipts

• Product specifications

• Installation certificates

• Building Regulations documentation

• Photographic evidence

Good records could be essential if a landlord later needs to demonstrate compliance or apply for an exemption.

Should Landlords Start Making Improvements Now?

There is no need to panic, but it makes sense to start planning.

Before spending significant sums, landlords should understand the property’s current EPC, when it expires and which improvements are realistically suitable.

Some sensible steps include:

• Check the property’s current EPC rating and expiry date

• Keep evidence of previous insulation and improvement work

• Retain invoices for qualifying work completed since 1 October 2025

• Consider carrying out improvements during vacant periods

• Avoid assuming that one particular measure will guarantee a C

• Obtain professional advice before undertaking expensive work

• Keep an eye on the final regulations and HEM guidance

Improving loft insulation, heating controls or low-energy lighting may help some properties, but every home is different. More expensive work should not be commissioned solely on the assumption that it will produce a particular future rating.

Can an Assessor Guarantee an EPC C?

No.

An EPC rating can only be confirmed once the property has been assessed and the calculation completed using the methodology in force at that time.

This will become particularly important when HEM and the new metrics are introduced. A property may perform differently across its fabric, heating, smart-readiness and energy-cost metrics.

An assessor can explain what is recorded during the assessment and what appears within the certificate, but cannot guarantee a future rating before the calculation has been completed.

The Main Points for Landlords

As of August 2026:

• The current legal minimum generally remains EPC E

• The government intends to introduce a new standard from 1 October 2030

• There is no earlier deadline for new tenancies

• Future EPCs will contain four headline metrics

• Landlords will generally need a C for fabric performance and a C for either heating or smart readiness

• The planned cost cap is £10,000 per property

• Relevant expenditure from 1 October 2025 may count

• Existing EPC C certificates lodged before 1 October 2029 may receive transitional protection

• HEM is intended to replace SAP

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  A modular version of HEM is being developed to perform the role currently carried out by RdSAP

• Reformed domestic EPCs are currently planned for the second half of 2027

• Some details still require legislation and final government guidance

  
  

The direction of travel is now much clearer, but the assessment system and regulations are not yet fully in place. Landlords should plan ahead, retain evidence and avoid making expensive decisions based solely on old headlines or previous versions of the proposals.

If you need a current EPC for a rental property across York, Selby, Tadcaster, Castleford, Pontefract, Knottingley or Sherburn in Elmet, contact me for a quotation.

Domestic EPCs start from £85, with certificates usually issued within 24 hours of the assessment.

Information checked on 19 August 2026. EPC policy and regulations can change, so landlords should check the latest government guidance before making compliance decisions.