Well-intentioned green PRS policy must be well-implemented – Sedgwick

With the sector making up a fifth of English households, it is an important aspect of the decarbonisation of the UK’s housing stock as part of broader initiatives to reach net zero by 2050. And, resulting in lower energy bills and improved living conditions for tenants, alongside increased property value for landlords, it’s a no-brainer.

However, while the government’s proposed regulations are well-intentioned, they risk becoming barriers rather than enablers of progress unless they are grounded in practical implementation. 

A mammoth task to improve energy efficiency in the PRS 

In our recent response to the Department for Energy Security and Net Zero (DESNZ) consultation, we outlined several key considerations and proposed actionable solutions.

A central component of this is understanding the scale of the issue. 

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If the policy were to take effect on 1 January 2026, there would be 504 working days until 1 January 2028 and 1,008 until 2030. With nearly three million private rented sector (PRS) properties estimated to be below Energy Performance Certificate (EPC) C, this would require upgrading nearly 6,000 homes per day by 2028, or around 3,000 per day by 2030 – an unrealistic target given current constraints. 

Compounding this formidable hurdle is the nature of PRS stock. Many properties are older, terraced houses or leasehold flats that are inherently more difficult and costly to retrofit. This is particularly true in the North and Midlands, introducing regional disparity. These complexities are further exacerbated by a shortage of skilled labour and supply chain constraints, intensified by the government’s concurrent goal of delivering 1.3 million new homes during this Parliament. 

To address these issues, we’ve made two key recommendations.

First, we propose a phased implementation with homes let for new tenancies required to achieve EPC C by 2030, 2033 for extended tenancies and 2035 for all.

Second, we advocate for a national skills and training programme to ensure a sufficient workforce is available to carry out the necessary upgrades. 

The financial challenge 

UK Finance, the financial services trade association, has echoed our concerns and then some, citing data that suggests the sector will not achieve minimum EPC C standards until between 2037 and 2043 without additional support and policy adjustments. 

The government has suggested raising the cost cap from £10,000 to £15,000. However, higher costs associated with harder-to-retrofit homes could lead to them being offloaded. Their nature means that such properties represent unattractive investments for other landlords, increasing the likelihood of being bought by owner-occupiers. With no equivalent energy-efficiency standards mandated for homeownership, the problem effectively moves from one tenure to another. 

Even if the government’s estimated average upgrade cost of £6,100-6,800 is accurate, this remains a significant financial burden, especially for portfolio landlords.

To mitigate this, we recommend financial support measures such as expanding grant schemes like the Warm Homes Grant, introducing tax incentives, and offering government-backed low-interest loans. We also support reinstating the £10,000 cap with a five-year exemption period. 

While these are key aspects of the proposals that we feel need a rethink, we’ve also made suggestions in other areas to shape policy that aligns ambition with realism. This is necessary to ensure the sector is able to play its part in achieving the UK’s net zero 2050 target, benefitting tenants and landlords as well as the environment.