Part of the UK government’s plan to reduce the nation’s carbon footprint is to continue making rented homes more energy efficient by increasing minimum EPC (Energy Performance Certificate) ratings. Responsibility to bring rented domestic buildings up to standard falls squarely on landlords’ shoulders.

While there’s a clear business case for making energy efficient home improvements, landlords need to be aware that these upgrades can render properties significantly underinsured.

In this article, we offer clarity on your EPC obligations as a UK landlord in 2026, while explaining the link to increasing underinsurance risk across the nation.

What are the most recent EPC requirements for UK landlords in 2026?

If you own a rental property in the UK in 2026, your current EPC requirement is to ensure that your property meets an E grade on the EPC rating scale.

This threshold was set as part of the government’s Minimum Energy Efficiency Standard (MEES), which came into action in April 2018.

The standard initially stipulated that any property on the F or G band of the EPC scale could not be let privately on an assured tenancy agreement or have a tenancy renewed. However, an April 2020 amendment expanded the standard to include existing tenancies.

In short, whether you currently have a tenant or are looking for one, your property needs to land in the E band of the EPC scale.

Understanding the E band on the EPC rating scale

While more affordable to heat and power than those that fall into F and G categories, properties in the E band of the EPC scale are not considered cost-effective or environmentally friendly.

E-rated properties show slightly below average performance, with energy efficiency landing somewhere between 39 and 54%. Buildings that fall into this bracket tend to be poorly insulated and typically rely on subpar heating systems.

This is why the government is likely to set a new standard – possibly soon.

Band C – the coming EPC standard for privately let properties in the UK

Initially, the government proposed raising the EPC requirement to band C for new tenancies by 2025, and for all privately let properties by 2028; however, these plans were scrapped in 2023, along with a suggested £30,000 non-compliance fine (it remains £5,000).

Now, the Labour government is committing to a target of all rental properties achieving an EPC rating of C by 2030 across England and Wales:

• New Tenancies: Must meet EPC Band C by 2028.

• All Tenancies: Must meet EPC Band C by 2030.

Understanding the C band on the EPC rating scale

The C band of the EPC scale is the lowest bracket of the top tier standards.

A C rating means a property is between 69 and 80% energy efficient. It indicates that the structure was built in accordance with energy-conscious principles or was retrofitted to significantly improve efficiency.

EPC requirements and underinsurance risk – explained

Energy efficient home improvements can pay off in two key ways:

• Lower energy bills make your property more enticing to potential tenants, and
• Energy-conscious appointments increase the market value of properties.

But what most don’t consider is that the rebuild value of a property also rises when renovations increase energy efficiency ratings.

The rebuild value of a property is the amount it would take to rebuild it as is from scratch on the land it currently stands on – should it become heavily damaged.

If your property is destroyed by fire, floods, or another devastating incident, your insurance needs to cover the entire cost of the rebuild. Otherwise, your payout will fall short, and you’ll have to cover the difference out of pocket.

But EPC upgrades are costly: high performance insulation costs more than outdated types; heat pumps cost more than traditional heating systems, both in terms of materials and insulation; and extras like solar panels bump the price of a rebuild up even further.

So, if your insurance coverage was calculated before your upgrades were installed, the increase in rebuild value will mean that you’re no longer fully protected should the worst happen.

How much will I be underinsured when my property meets EPC rank C?

The cost of bringing a property up to the C bracket of the EPC scale differs from structure to structure based on various contributing factors, including:

• Current bracket
• Property age
• Current condition
• Regional variations in materials and labour costs
• Where within the C band range you’re aiming to achieve

That said, the government estimates that most UK landlords will need to invest somewhere between £6,100 and £6,800 to achieve compliance, with a maximum price cap set at £15,000 per property.

This means that if the necessary improvements would cost you more than £15,000, you’re not legally required to go beyond that to meet your obligation.

The government has also discussed introducing an affordability exemption that would lower the price cap to a maximum of £10,000. Again, this would mean that you have met your obligation once your costs reach that limit – regardless of the EPC band your property then falls into.

So, by the government’s estimation, energy efficient upgrades required to either reach EPC band C or otherwise meet your obligation could cost you anywhere between £3,100 and £15,000.

But the operative word there is “estimation”. There’s a chance the baseline will be much higher than £3,100, as the government has significantly underestimated the costs of home energy improvements before.

In terms of underinsurance, you can assume that your total rebuild costs will increase by however much you initially invest. For example, if you hit the £15,000 spend cap, you can expect to be underinsured by roughly £15,000.

How changing EPC calculations might impact your bottom line in 2026

One complication landlords needed to be aware of in 2025 was that EPC ratings were likely to be reassessed sooner rather than later. The pre-2026 system was based mainly on estimated energy costs, which meant cheaper-to-run gas boilers often scored better than low-carbon heating systems like heat pumps, even though the latter are more efficient and environmentally friendly.

The government had discussed plans to shift the EPC framework to focus more heavily on energy efficiency and carbon performance rather than just cost. In 2026, the government is making these plans concrete with the rollout of the RdSAP 10 methodology and the transition to the Home Energy Model (HEM). The system now prioritises carbon performance and fabric efficiency (how well your walls and roof actually hold heat).

For UK landlords in 2026, this introduces the following financial risks:

• The “evidence gap” penalty: Under the new 2026 rules, assessors can no longer make “favourable assumptions” about your property. If you’ve installed high-spec insulation or a heat pump but cannot provide documentary evidence (invoices, photos, or spec sheets), the software defaults to the worst possible rating. You could pay for a C but be legally stuck with a D.

• The re-rating risk: If your property currently holds a C rating from a pre-2025 assessment, it may no longer meet that standard under the new carbon-focused 2026 criteria. Many landlords are finding that yesterday’s C is today’s D, requiring fresh investment to maintain compliance for new tenancies.

• Compounded underinsurance: As you upgrade to meet these stricter technical standards, the rebuild cost of your property climbs. If your insurance is based on a standard valuation from even two years ago, you are likely underinsured by the exact amount of your eco-investment (up to £15,000 per unit).

How can landlords protect against underinsurance while meeting their EPC requirements in 2026?

The only way to ensure your property is fully insured in the event of an emergency is by establishing an up-to-date rebuild value via a Reinstatement Cost Assessment.

Cardinus has a nationwide network of highly experienced property assessors capable of evaluating any property type wherever it’s situated in the UK.

With nearly 30 years’ experience in property risk management, delivering 30,000 surveys annually, we ensure the rebuild cost of your property is accurately valued, accounting for all contributing factors, from EPC upgrades to loss of income during the rebuild process.

Our skilled assessors can also combine additional safety surveys in a single visit, helping you reach and maintain compliance across the board.

Book your Reinstatement Cost Assessment.

What is an EPC rating?

An EPC rating indicates how energy efficient something is.

If you’ve bought any new electronics recently, you may have noticed a colourful certificate showing grades A (green) through G (red) in the box, with an arrow pointing to one of the grades.

This is an EPC certificate showing the EPC rating of the product – and just like your electronics, your property has an EPC rating.

The higher the energy efficiency of your property, the higher the grade, with A being the highest possible grade, and G being the lowest.

How are EPC ratings calculated for properties?

EPC ratings are worked out by an accredited energy assessor, who inspects key features of your property. They look at things like the construction of the walls, roof, windows, and floors, the type of heating and hot water systems installed, as well as any insulation or renewable energy technologies in place.

Using government-approved software, these details are combined to calculate the property’s overall energy efficiency and assign it a rating from A to G.

In summary – don’t let EPC upgrades get your finances down

Big eco upgrades to rental properties inevitably increase the total cost of a rebuild, so it’s essential to book a Reinstatement Cost Assessment and then contact your insurance provider to adjust your coverage accordingly.

Contact Cardinus today for more information about our assessors and assessment processes.