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Landlords to Upgrade Energy Efficiency

Liberal Democrat · what the evidence says

An independent, source-checked look at Liberal Democrat’s policy “Landlords to Upgrade Energy Efficiency” — what it would actually do across the things that affect your life. Every claim below quotes the source behind it. How this works.

Affordable housing — Mixed picture

moderate · moderate confidence

Requiring landlords to upgrade to EPC C by 2028 should cut energy costs for renters in inefficient homes, but could push some landlords to sell up, shrinking rental supply and pushing rents up. The net effect on affordability depends heavily on whether landlord exits happen at scale.

The evidence

Biggest unknown: Whether the compliance cost — estimated at around £9,000 per property on average — triggers large-scale landlord exits and reduces rental supply, or whether the sector absorbs it as previous regulatory changes suggest it might.

Our reading: This policy creates a genuine tension between two housing affordability pressures. On the benefit side: over 70% of low-income private renters live in energy-inefficient homes, and those in EPC E-rated properties pay roughly £595 more per year on heating than they would in a C-rated home. Mandatory upgrades — if delivered — would directly cut these costs for the renters who most need relief. That is a real affordability gain concentrated on lower-income tenants. On the risk side: roughly 42% of private rented properties still need upgrading, and the typical upgrade cost (~£9,000) is steep — around 75% of a single-property landlord's median annual rental income. For landlords with older, solid-wall properties, costs are higher still. At these levels, a meaningful share of smaller landlords may exit rather than comply, as landlord bodies warn. Supply contraction would push rents up, potentially hurting the very tenants the policy aims to help. The Resolution Foundation argues large-scale exit is unlikely, citing sector stability through previous regulatory shocks. But this remains a contested projection. The net verdict is mixed: the energy-cost savings for sitting tenants are real and evidence-backed; the supply-side risk is credible but contested. The policy improves quality-of-home affordability while risking worsening supply-side affordability, with the balance depending chiefly on the scale of landlord exit — a parameter the evidence cannot resolve with confidence.

Cost of living — Mixed picture

moderate · moderate confidence

Requiring landlords to reach EPC C by 2028 should cut tenants' energy bills — especially for the poorest renters in the least efficient homes — but upgrade costs may be passed on through higher rents or reduced rental supply, which would push up housing costs. The net effect on tenants' overall cost of living depends heavily on whether landlords comply, exit, or pass costs on.

The evidence

Biggest unknown: Whether landlords — especially small, single-property landlords with older homes — absorb upgrade costs, pass them on as higher rents, or exit the market, which would determine whether tenants see a net gain or loss in affordability.

Our reading: The policy directly targets the cost of keeping homes warm — the most acute energy cost for renters. The measurable baseline is stark: low-income renters are disproportionately concentrated in the least efficient homes, and the annual heating premium for a band-E or worse property runs to £595–£1,339. If landlords comply and do not pass costs on, tenants — especially the most vulnerable — stand to gain hundreds of pounds a year in lower energy bills, a meaningful improvement to cost of living. However, the cost burden on landlords is substantial: the Resolution Foundation puts the typical upgrade at ~£9,000, rising to £10,000–£25,000 for older solid-wall properties. Landlords facing these costs have three options: absorb them (improving tenant outcomes), pass them through as higher rents (partially or fully offsetting energy savings), or exit the market (reducing supply and potentially raising rents across the sector). Evidence on which dominates is genuinely split: the Resolution Foundation sees large-scale exits as unlikely given sector stability since 2015; landlord associations and some MPs warn of significant sell-offs, especially for small landlords with older stock. The net O2 effect therefore depends on this crux. On energy bills alone, the direction is clearly positive for the ~42% of private renters in sub-C properties, with the poorest renters benefiting most. But if upgrade costs feed through to rents — even partially — the disposable-income gain is eroded. The exemption cap (spend up to a limit, then register for exemption) limits worst-case landlord losses but also means the hardest-to-treat properties may never be upgraded, capping the benefit for tenants in those homes. On balance, the bill-reduction benefit is real and evidence-backed; the rent-pass-through risk is also real but disputed. Both effects are material enough to call this mixed rather than a clear improvement.

Clean environment & nature — Helps

moderate · moderate confidence

Requiring rental properties to reach EPC C by 2028 will cut carbon emissions and reduce energy use in a sector where many homes are still inefficient, though exemptions and landlord exits could limit how many properties actually improve.

The evidence

Biggest unknown: Whether landlords comply, sell up, or claim exemptions will determine how many properties actually get upgraded and how much emissions actually fall.

Our reading: The policy directly targets energy efficiency in a sector where a large share of properties remain below EPC C, and where low-income renters are disproportionately concentrated in inefficient homes. Upgrading insulation, glazing, and heating systems in these properties will reduce energy consumption and associated carbon emissions — the core O6 indicators. The trajectory from 12% to 56% EPC C or above across all English homes since 2010 demonstrates that such improvements are technically achievable at scale. The environmental gain is real but subject to meaningful attrition. Exemptions allow landlords who spend up to the cost cap to avoid compliance if they still fall short, which is most likely for the oldest, highest-emission properties — exactly those where environmental benefit would be greatest. Some landlords, particularly those with hard-to-treat Victorian or Edwardian stock, may sell rather than upgrade; if sold to owner-occupiers or other landlords who also do not upgrade, the environmental benefit is deferred rather than delivered. The Resolution Foundation's view — that large-scale exits are unlikely given sector stability through prior policy changes — is the most credible independent check on the exodus risk, though it is still a forecast. The adequacy of financial support for smaller landlords remains contested and could affect compliance rates. On balance, the mechanism is concrete (statutory requirement, cost cap, exemption framework) and targets a demonstrably high-emission segment of the housing stock. Near-term and long-term effects broadly align: properties upgraded by 2028 lock in lower-emission performance for years, and EPC C properties achieved before October 2029 are deemed compliant until their certificate expires. The magnitude is moderate rather than major because exemptions, potential exits, and the already-improved baseline (58% of PRS already at C per government estimates) limit the additional uplift.

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