August 9

Landlords Seek Incentives for EPC Upgrades


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The UK’s Residential Landlords Association supports a plea for financial assistance to landlords enhancing the energy standards of their estates.

E3G, a prominent think tank, has penned a letter to the Treasury highlighting that roughly a quarter of private rental households might be struggling with fuel poverty. Thus, there’s an urgent call for strategies to encourage landlords to boost energy standards.

This letter, endorsed by Coventry Building Society, Citizens Advice, and Nationwide Building Society, suggests that “modifying tax structures to let energy performance improvements counterbalance rental earnings might render such investments more appealing to landlords”.

The statement further mentions that the Chancellor’s Autumn Announcement, anticipated in November, presents an apt moment to bring in such incentives.

Backing the letter’s urging, NRLA’s chief Ben Beadle remarks: “It’s in everyone’s interest to have energy-efficient rentals. However, it’s imperative the government provides a transparent plan and sensible timeline for landlords to achieve this. It’s urgent for officials to craft a comprehensible financial framework to instil certainty and assurance in landlords.”


The E3G letter reads:

Dear Chancellor of the Exchequer, 

Re: Incentivising energy efficiency investment in the private rented sector 

We are writing as a coalition of financial institutions, consumer groups, fuel poverty organisations and landlord and letting agent associations to encourage the reintroduction of tax exemptions for energy efficiency improvements made to privately rented properties. This will make investments more attractive to landlords and property agents, while reducing energy bills for renters. 

There is a compelling case for boosting energy efficiency in the private rented sector. Citizens Advice highlighted that renters face widespread problems with damp, mould and cold, with 1.6 million children exposed to these conditions. 

Around two-thirds of privately rented properties in England and Wales fall below EPC C, the government’s target rating for all fuel poor homes by 2030. 

There is evidence that tax incentives could help make investments more attractive, incentivising retrofit. Recent survey evidence from Propertymark, the UK’s leading professional body for property agents, shows that nearly 70% of agents think that support should extend to allow energy efficiency improvement to be offset against capital gains tax. 

A simple tax restructuring to allow energy performance improvements to be deductible against rental income could help make investment more attractive for landlords. Individual landlords currently pay income tax on their rental properties at the same rate as other earned income. 

Before they work out how much they will be taxed, landlords may deduct costs of managing the property, legal fees, replacement furniture, insurance, utility bills, ground rent and maintenance and upkeep – but not energy saving improvements. We encourage this allowance to be expanded to include expenditure on improvements that result in an increase in the Environmental Impact Rating of the property, or included in an agreed list of measures (i.e., loft insulation, cavity wall insulation, etc). This would represent a maximum tax revenue foregone of £1.2bn to 2028, or around £0.24bn per annum over 5 years. 

This simple tax change could drive investments that bring about significant energy bill savings for renters and support a shift towards higher standards, helping meet fuel poverty targets. We would be pleased to discuss this further. 

Kind regards, 



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Energy standards enhancement, Financial assistance for landlords, Tax incentives for energy efficiency, UK Residential Landlords Association

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