By The Decent Homes Standard and EPC changes pose a significant challenge to landlords. Here, we look at how to finance the changes to meet the new requirements.
With the Renters’ Rights Bill (RRB) on the horizon, 2026 is shaping up to be a pivotal year for buy to let landlords. However, despite the Bill’s fast approach, we’re still in the dark on the details.
Likewise, while the government still intends to raise the minimum EPC rating for rental properties to a C or above by 2030, there’s still no clear guidance on how this will be implemented.
What we do know is that both the EPC changes and the Decent Homes Standard will require landlords to invest in their properties. Although some grants are available, none cover 100% of the costs, and many have cost caps, leaving landlords with significant bills to pay.
To make matters worse, the timelines for these requirements are vague and unconfirmed, but they will come. Therefore, planning ahead could save you time, stress, and money.
Financing Property Improvements
Whether you’re upgrading insulation or installing a new boiler, the cost of improving your property’s standard or energy efficiency can add up quickly.
Some landlords may plan to finance their property improvements using savings, but that may not be an option for larger portfolio landlords. Fortunately, there are several different finance options available to help landlords spread the cost:
Remortgage
If you have sufficient equity in your portfolio or property, you could look to remortgage and release capital to fund the energy-efficiency improvements. This is a straightforward process, but it may incur early repayment charges (ERCs) on your current mortgage, so it’s best to speak to a broker if you’re unsure.
Further Advance
If you’re far from your ERC period, a further advance may be a better choice. This allows you to borrow more from your existing lender and secure a new loan without breaking your initial rate. Securing a further advance relies on there being enough equity in the property and passing affordability checks. Keep in mind that the further advance interest rate will likely cost more than your original rate. Although your original monthly mortgage repayment remains the same, you will need to repay the further advance loan at the same time.
Second Charge
Alternatively, you might be able to take out a Second Charge with a new loan from a new lender. The rates available for Second Charge mortgages are typically more expensive due to the added risk for the second lender. However, you need permission from your existing lender, and adequate equity, to be able to apply for a second charge. Consequently, it’s best to explore the other options first.
Bridging Loan
Many landlords fund energy improvements with bridging loans. As short-term finance costs are typically higher than buy to let loans, this can be expensive. However, it’s a great option for landlords looking to make property improvements quickly before letting out to a new tenant or remortgaging.
Understanding the upcoming changes
As a reminder, here’s what to expect from the Decent Homes Standard and what we know so far about the EPC changes:
The Decent Homes Standard for Rental Properties
Currently applied to the social housing sector, the Decent Homes Standard is expected to be extended to the private rental sector by 2035. We’re still awaiting clear government guidance on the full scope of the changes, but they’re likely to include new requirements around property safety, condition, and energy efficiency.
The new framework will shift how landlords run and maintain their properties. Even though the implementation is still a decade off, it’s worth considering what improvements might be needed now to future-proof your property portfolio.
Read more on what the Decent Homes Standard will include here.
EPC Minimum Requirements
The government’s plans to increase minimum EPC requirements to all rental properties to a C or above by 2030 are still in place.
It’s important to remember that once the EPC changes are in, if your property doesn’t have the right rating, it could be deemed unmortgageable and therefore unlettable. Consequently, you’ll need to secure bridging finance fast to increase the EPC rating, which could be a significant cost.
The government estimates the average cost for landlords to upgrade a property is £6,100-£6,800, depending on the scale of works required. Some potential necessary improvements might include:
- Upgrading boilers or heating systems
- Installing double or triple glazing
- Adding insulation
- Switching to LED lighting
- Fitting smart meters
What landlords really want to know, but still lack clarity on, is:
- Potential exemptions for older or listed buildings
- Cost caps (the government has proposed £15,000 per property, but this is yet to be decided)
- Government grants
Read our 8 top tips to boost your property’s EPC rating
Until we have the full details, landlords are left to plan with limited information. Starting early and getting the right finance in place can help you spread the cost and avoid unnecessary last-minute stress.
Mortgage Finance Brokers Limited is authorised and regulated by the Financial Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgage Finance Brokers Limited is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.
Comments