EPC C targets should not require landlords to raise rents claims government

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EPC C targets should not require landlords to raise rents claims government

The government claim landlords will not have to raise rents to meet EPC C targets by 2030, despite a government consultation claiming the opposite.

Under the Warm Homes Plan, the government announced all private rented properties will need to meet EPC C targets by 2030.

However, a government consultation on meeting EPC C targets admits landlords may sell up or increase rents due to EPC rules.

Our proposed changes should not require landlords to increase rents

In response to a written question from Conservative MP Paul Holmes on “whether the government has made an assessment of the potential impact of the costs of new energy efficiency measures on the level of open market rents.”

Martin McCluskey, Minister for Energy Consumers, said landlords would not need to raise rents.

He said: “The government recently consulted on increasing minimum energy efficiency standards in the domestic private rented sector, including proposals for rented homes to achieve Energy Performance Certificate C or equivalent by 2030.

“We have engaged with landlord and tenant groups in developing this policy and set out several proposals to help landlords reach the new standard.

“Our proposed changes should not require landlords to increase rents. Instead, they will help tenants cut their energy bills by delivering more energy-efficient homes.”

Landlords may decide to leave the market

However, as previously reported on Property118, a government consultation documents admits some landlords could choose to sell rather than comply with EPC rules.

The document says: “Landlords may decide to exit the market. The likelihood of this is dependent on the current profitability of their rental property, the level of costs they face, the price landlords would receive from the sale of their property and their wider financial circumstances.

“The prices of EPC F/G PRS properties affected by the current regulations (requiring PRS properties to be EPC E) decreased by about £5,000 to £9,000, relative to unaffected properties.

“If a similar situation were to arise in the context of higher Minimum Energy-Efficiency Standards (MEES), landlords may decide it is more profitable to improve properties and remain as landlords. However, landlords who face the highest costs may decide, on balance, it is still less costly to sell their property than comply with the higher energy performance standard.”

The document also says some landlords may also decide instead to pass costs onto tenants through higher rents, but some tenants may decide to stay if higher rents are offset by lower energy bills.

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How Mortgage Valuations Work for Buy-To-Let Properties

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How Mortgage Valuations Work for Buy-To-Let Properties

When applying for a buy-to-let mortgage, one of the most important steps is the valuation. Lenders need to know both the market value of the property and the expected rental income. In 2026, with affordability tighter and specialist properties more common, valuations are under greater scrutiny than ever. Understanding how valuations work helps landlords avoid surprises and prepare stronger applications.

The Role of Valuations in Buy-To-Let Lending

A valuation serves two purposes for lenders:

• Market value check – ensures the property is worth the price paid or remortgage amount requested.
• Rental assessment – confirms rental income assumptions for affordability testing.

If either the property value or the rental assessment comes in lower than expected, the loan amount may be reduced or the application declined.

Types of Valuation in 2026

Lenders may use different valuation methods depending on the case:

• Desktop or AVM (Automated Valuation Model) – quick, low-cost checks used for low-risk cases and product transfers.
• Drive-by valuation – surveyor views the property externally to verify condition and comparables.
• Full internal inspection – detailed inspection including rental comparables and tenancy information.
• Commercial-style valuation – used for larger HMOs and semi-commercial properties, often based on income rather than bricks-and-mortar.

How Rental Income Is Assessed

Surveyors assess rent by looking at comparable local properties and current tenancy agreements. They may take a conservative view, particularly if the property has unusual features or higher-than-average rents.

Example: A landlord believes a flat rents for £1,200, but the valuer uses £1,100 based on comparables. At a 145% stress test, this reduction could mean borrowing £15,000 less.

Valuations for HMOs and Holiday Lets

Specialist properties are valued differently:

• Small HMOs (up to 6 tenants) – often valued as standard houses, with rent assessed per room.
• Larger HMOs – usually valued on a commercial basis, using rental income as the driver of value.
• Holiday lets – income projections may be based on average seasonal occupancy, not peak rents.

This means landlords should prepare realistic income evidence and be ready for cautious assumptions.

Case Study: Valuation Shortfall

Scenario: A landlord applied to remortgage a three-bed house at £250,000, expecting rent of £1,200 per month. The valuer reported £240,000 market value and rent of £1,100.

Outcome: The lower figures reduced the maximum loan by £20,000. The landlord had to inject extra funds to complete the refinance.

Lesson: Always allow for cautious valuations when planning borrowing.

How Landlords Can Prepare for Valuations

• Provide ASTs and rental statements to support declared income.
• Ensure the property is presentable and compliant with safety regulations.
• Research local comparables to anticipate valuer assumptions.
• Have contingency plans if values or rents come in lower than expected.
• Use brokers who can challenge valuations when appropriate.

Final Thoughts

Mortgage valuations are more than just a box-ticking exercise – they directly shape borrowing capacity. By understanding how lenders and valuers approach market value and rental income, landlords can prepare better, avoid disappointment, and build more resilient refinancing strategies in 2026.

Speak to Our Sponsor

Our sponsor helps landlords prepare for valuations, challenge incorrect assumptions and structure applications around realistic lender expectations.

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Publication date: Monday, 26 January 2026

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Rent increase challenge rules spark court backlog fears

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Property118

Rent increase challenge rules spark court backlog fears

Tenants challenging rent increases under new reforms could overwhelm courts, warns industry experts.

An article in The Times explains under the Renters’ Rights Act, tenants will be able to challenge any proposed rent increase at the First-Tier Tribunal (FTT).

Under the reforms, the tribunal will no longer be able to set a rent higher than that proposed by the landlord, even if it finds the market rent is higher. It will also be able to delay rent increases by up to two months in cases of hardship.

Landlords in limbo

The Times reports that any rent increase upheld by the tribunal would take effect only from the date of its decision, rather than when the landlord first served notice. This means that even unsuccessful challenges could delay higher rent payments for months, leaving landlords in limbo.

Geoffrey Vos, Master of the Rolls and head of civil justice in England and Wales, warned the Housing Law Practitioners’ Association that the rules under the Renters’ Rights Act could create “an incentive for tenants to apply to the FTT in respect of every increase in order to delay its implementation”.

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), told The Times: “With just 34 judges sitting on it, the tribunal is unlikely to cope with such an influx of cases once the act comes into force.

“It is one of many aspects of the act where warm words are not being matched by any evidence of the detailed work needed to ensure it works in practice.”

Court capacity could be overwhelmed

As previously reported on Property118, the NRLA has written to the Justice Select Committee, warning that court capacity could be overwhelmed by the Renters’ Rights Act.

The NRLA pointed out that landlords are having to wait weeks for court hearings to regain possession of their properties.

The NRLA said in the letter: “At Report Stage of the Renters’ Rights Act, the Housing Minister told the Commons that: “Court readiness is essential to the successful operation of the new system”. We agree with the Minister.

“However, the government has yet to define what it means by the courts being “ready”. Without that clarity, it is unclear what the planned digitisation of possession cases is intended to deliver or how success will be measured.”

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