Energy Efficiency in the PRS

VOLA Position on Energy Performance Certificates (EPCs)

The Voice of Landlords Associations (VoLA) supports genuine improvements to housing quality, comfort and energy performance. However, the current direction of EPC policy is failing to achieve its stated aims and is actively causing harm to tenants, landlords, and the private rented sector as a whole.

1. Prolonged uncertainty is doing more harm than good

The repeated delay and lack of clarity around EPC reform — now pushed beyond the 2029 general election — has created a damaging policy vacuum. Landlords are being asked to plan for significant capital expenditure without certainty that the policy will survive a change of government.

The predictable result is inaction. Many landlords reasonably assume that the next incoming government may cancel, delay or materially alter the policy, and are therefore deferring investment decisions.

If EPC reform does proceed after the election, the sector will face an unmanageable volume of properties requiring extensive works within an unrealistic timeframe, making further delays inevitable. The current approach therefore achieves neither certainty nor progress.

2. EPCs have drifted away from their original purpose

EPCs were originally designed to give occupiers a simple, comparable indication of energy use and running costs, similar to appliance energy labels. Over time, that purpose has become blurred.

EPCs are now being treated as a primary regulatory compliance tool for decarbonisation, despite the underlying methodology still being heavily influenced by predicted fuel costs, rather than real‑world performance, suitability of technology, or affordability for tenants.

This mismatch between purpose and use sits at the heart of many unintended consequences now emerging.

3. The current EPC system contradicts wider energy policy

Under the existing EPC methodology:

• A modern gas boiler is still rated as highly efficient

• Electric heating is heavily penalised

• Heat pumps can worsen EPC scores in many properties

• Gas is favoured due to fuel price assumptions

This directly conflicts with government policy that seeks to move homes away from fossil fuels and towards electrification.

In practice, a landlord renovating an older mid‑terrace property would typically achieve:

• A poor EPC if retaining electric storage heaters

• A much better EPC by installing a new gas boiler

• A high‑risk and often impractical outcome if installing a heat pump

The system therefore incentivises short‑term, fossil‑fuel‑based decisions while penalising future‑facing technologies.

4. Many properties are fundamentally unsuitable for heat pumps

A large proportion of the private rented sector consists of rows of small terraced houses, often Victorian or Edwardian, with very small yards or no external space at all.

For these homes:

• Permitted development rules often cannot be met due to boundary distance requirements

• Noise limits are extremely difficult to comply with in dense, built‑up areas

• Conservation area restrictions further limit installation options

• External units may be impossible to site without causing disturbance or complaints

Even where installation is technically possible, noise and vibration risks in tightly packed streets create ongoing neighbour and enforcement issues.

Any EPC policy that assumes the universal suitability of heat pumps fails to reflect the physical reality of the housing stock.

5. Heat pumps are often unsuitable for older, uninsulated homes

In older and hard‑to‑treat properties, heat pumps frequently:

• Cannot adequately heat the home without deep retrofit

• Require extensive insulation and fabric works

• Risk higher energy bills for tenants, not lower

This creates a real risk that tenants are pushed into fuel poverty in the name of theoretical efficiency gains.

6. Compliance would require tenant displacement using Ground

To reach future EPC targets, many properties would require substantial redevelopment, including major insulation works, rewiring, and heating system replacement.

By definition, these are works that cannot reasonably be carried out with the tenant living in the property, engaging Ground 6 of Schedule 2 to the Housing Act 1988 — the mandatory redevelopment ground.

This creates an unavoidable consequence of current EPC policy:

Landlords would be forced to lawfully evict sitting tenants solely to meet an EPC target.

Once works are completed, the property would return to the market at a higher rent, reflecting the capital investment required. This outcome:

• Displaces stable tenants

• Reduces affordability

• Undermines security of tenure

• Directly contradicts stated government objectives

Regulatory compliance should not rely on eviction as a routine mechanism.

7. The £10,000 cap is an exit trigger, not a safeguard

While a £10,000 cost cap with a 10‑year exemption is presented as protection, in reality it:

• Absorbs most or all net rental profit over multiple years

• Provides no long‑term certainty

• Simply delays the same unsolvable problem

For many landlords — particularly small portfolio owners — the rational response will be to sell the property out of the rental sector, reducing supply and increasing pressure on rents.

8. VoLA’s position

VoLA supports meaningful improvements to energy performance, but only where policy is technically credible, economically realistic, and socially responsible.

We are calling for:

• Clear post‑election certainty

• EPC metrics that align with decarbonisation goals

• Recognition that housing stock is not uniform

• A system based on real‑world outcomes and tenant affordability

• An approach that improves homes without shrinking the rental sector or displacing tenants

• A staged progressions. (From E-D-C over a longer period of time)

Uncertainty is not neutral.Misaligned policy is not harmless.EPC reform must be workable, fair, and grounded in reality.