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The Warm Homes Plan: what does it mean for residential landlords?
Anticipation around the Government’s Warm Homes Plan (WHP) has been heating up ever since it was first announced back in 2024. Now we have more detail about what’s in the plan, we can consider what actions residential landlords need to take to meet the new rules.
Read time: 3 mins Added: 12/03/26
Essentially, the WHP means landlords with residential properties that have an Energy Performance Certificate (EPC) of D or below must make improvements to bring them up to an EPC C rating, or higher. Any properties that don’t meet that standard by 1 October 2030 can’t be let to tenants – with a couple of exceptions that we’ll cover here.
What to consider when taking the first step
- The WHP doesn’t cover commercial properties, but a similar plan to cover this category is in the pipeline.
- The current EPC assessment is more focused on a property’s estimated running costs rather than the energy and emissions efficiency and this methodology will be reformed later this year.
- There is a strong focus on electrification, particularly on solar and new minimum energy efficiency standards (MEES) for social and private rented homes.
- The Government estimates that the average cost of meeting the new standard will be around £5,400 per property. 1
- The WHP includes a spending cap – landlords will not be expected to spend more than £10,000 per property. If you spend this amount on improvements and the property has still not achieved EPC C, you can apply for an exemption so you can keep on renting it out for 10 years. 2
- For properties valued at under £100,000, the cost cap is reduced to 10% of the property’s value. 2
We can anticipate that the Plan will generate increased demand for skilled tradespeople, including energy efficiency installers and EPC assessors, at a time when the sector is already experiencing a skills shortage. That should act as an incentive for landlords to act early.
Identifying effective investments
Financing warm homes
Many of the retrofits recommended by the Green Buildings Tool could qualify for discounted finance, including the Lloyds Buildings Transition Loan. This is a product designed for businesses with an annual turnover up to £100 million and provides either ‘arrangement fee free’ or discounted lending to buy or refinance energy-efficient properties, rated EPC A or EPC B. It also enables businesses to refinance or purchase EPC C–G properties, provided they commit to retrofitting them to at least EPC B within an agreed timeframe.
As well as the Buildings Transition Loan, Lloyds offers discounted lending to fund buildings’ retrofit costs as part of the Lloyds Clean Growth Financing Initiative.
For eligible property clients with a turnover of up to £25 million, lending to support green investment may benefit from a reduced arrangement fee, ranging from £0 up to a £150,000 reduction, helping to lower the upfront cost of improving energy efficiency and EPC ratings. For clients with a turnover over £25 million, margin discounts of up to 0.20% may also be available for up to five years.
The incoming WHP may seem some time off, but it will likely pay to get ahead of the crowd, because demand for the skills and services needed to comply with the new rules could well outweigh the supply.
Not only that, properties with better EPC ratings and therefore lower energy bills, can attract a premium, commanding higher rents and selling at higher prices.3 So, it’s not just a case of compliance, there can also be a strong commercial argument for investing in energy efficient homes.
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All lending is subject to status. Eligibility criteria apply.