"Shockingly, our data reveals that for many landlords, the cost of renovations could exceed their annual rental income by nearly 50%"
- Kimberley Kealing- Just Landlords
Landlords across England and Wales are confronting a £26 billion financial hurdle as the government’s 2030 energy efficiency targets draw nearer. Analysis from landlord insurance specialist Just Landlords shows 3.38 million private rental properties still fail to meet the proposed EPC C minimum, with some retrofit costs exceeding annual rental income by nearly 50%.
The government’s Warm Homes Plan requires all tenancies to reach at least Band C by 1 October 2030. While the average cost to upgrade a non-compliant property is £7,633, regional variations are significant. Rural and northern areas face costs as high as £12,000 per property.
Repair-to-rent ratio highlights pressure on landlords
Just Landlords calculated a ‘repair-to-rent ratio’ to illustrate the scale of the challenge, comparing retrofit costs to a property’s annual rental income. In Powys, for example, where 83% of properties are non-compliant, the average upgrade bill stands at £10,759, while average annual rents are just £7,248. This leaves landlords facing costs equivalent to 148% of their yearly rental income.
Regions with the highest repair-to-rent ratios include:
- Powys – 148%
- Hartlepool – 138%
- Isle of Anglesey – 135%
- Gwynedd – 131%
- Northumberland – 129%
In contrast, landlords in London can cover retrofit costs with only a few weeks of rental income due to higher average rents.
Regional compliance divides
Urban areas lead in compliance, while rural and coastal regions fall behind. The most compliant regions are:
- Tower Hamlets – 66% compliant
- West Northamptonshire – 55%
- Southwark – 53%
- Bracknell Forest – 51%
- Islington – 51%
At the other end of the spectrum, the least compliant areas include:
- Isles of Scilly – 90% non-compliant
- Ryedale – 88%
- Isle of Anglesey – 87%
- Burnley – 85%
- Pendle – 85%
Many of these areas also require major structural upgrades. Over half of properties in so-called ‘deep retrofit’ zones have EPC ratings of E, F, or G, demanding interventions such as solid wall insulation and heat pumps. Leading deep retrofit regions include:
- Isles of Scilly – 70%
- Isle of Anglesey – 60%
- Ryedale – 57%
- Eden – 56%
- Powys – 52%
Landlords warned of financial and insurance risks
“While the drive towards more energy-efficient homes is a vital step towards Net Zero, it involves a massive financial burden for landlords,” said Kimberley Kealing, managing director of Just Landlords.
“Shockingly, our data reveals that for many landlords, the cost of renovations could exceed their annual rental income by nearly 50%. Without significant support, this ‘green tax’ could leave landlords questioning the financial viability of their properties.”
Kealing also highlighted insurance implications, explaining, “From an insurance perspective, this national renovation project carries its own risk. Major works can increase a property’s risk profile, with a higher chance of claims related to structural damage, escape of water, and fire. Landlords in these ‘deep retrofit’ areas must ensure their coverage is tailored for the scale of works being undertaken.”
The analysis underscores that meeting the 2030 EPC target is not only a compliance challenge but a strategic and financial consideration for landlords, with retrofit planning, budgeting, and insurance all key to protecting long-term rental returns.
