Preparing portfolios for the next PRS regulatory shift – Steele

Proposals to raise MEES in the PRS have been under discussion for several years, with the current direction of travel resulting in PRS properties needing to reach Energy Performance Certificate (EPC) C by October 2030, subject to final legislation and the introduction of a new EPC framework.

For landlords, brokers and lenders alike, the focus has moved beyond whether change is coming to how the sector adapts in a way that supports rental supply, protects tenants and remains commercially workable.

The challenge facing landlords in complying with the new rules is not to be underestimated.

Around half of privately rented homes are currently rated D or below, equating to more than two million properties that would need improvement to meet the proposed standard.

Landlords are being proactive in responding to that challenge, however. The proportion of EPC A-C homes in the PRS more than doubled since 2013. This has only been possible with landlord investment, something that will need to continue.

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Upgrading a property’s energy performance often requires capital, careful planning and an understanding of how works will affect rental income and long-term value.

The role of brokers

Brokers are well-placed to help landlords navigate these decisions, whether that means structuring borrowing to fund improvements, reviewing portfolios in light of future standards or helping clients understand which properties remain viable investments.

From a lending perspective, energy efficiency is becoming another factor within a broader, more holistic assessment of risk and opportunity.

Properties that are cheaper to heat and easier to let are likely to be more resilient over time, particularly as tenant expectations continue to shift. For landlords taking a long-term view, investment in energy performance can support sustainability of income and asset value, rather than being seen purely as a compliance cost.

The mortgage market itself will continue to evolve in response. We are already seeing greater differentiation in product design, underwriting and support as lenders look to reflect the changing shape of the PRS.

That evolution creates opportunities for brokers who understand how regulatory change intersects with funding options and who can add real value through informed advice rather than transactional activity alone. The market has seen growth in remortgaging to fund property improvements in recent years, while there is also healthy demand for further advance finance for the same purpose.

Keeping sight of the bigger picture, we see that the PRS plays a critical role in meeting housing demand and maintaining supply must remain a priority. Encouragingly, the government did listen and ongoing dialogue with lenders, brokers and landlord representatives is essential to ensure that remains the case.

For Paragon, supporting landlords through periods of regulatory change is not new. We’ve been in the market for 30 years and buy to let (BTL) has always required adaptability, whether in response to tax changes, tenancy reform or economic instability.

With the right collaboration across the sector, it can also be an opportunity to improve the quality and resilience of the PRS, while creating meaningful advisory opportunities for brokers who are prepared to engage with the detail.