Proposed Overhaul of Energy Performance Certificates Will Impact the Entire Property Sector

The Energy Performance Certificate (EPC) system has long been a cornerstone of the UK’s approach to improving the energy efficiency of buildings. First introduced in 2007 in response to the EU’s Energy Performance of Buildings Directive, EPCs are now required whenever a building is sold, let, or constructed. Over time, they’ve evolved from a simple energy rating tool to a pivotal metric used by landlords, developers, homeowners, policymakers, and investors.

However, in a bold move to accelerate the UK’s net zero ambitions and reform a system increasingly criticised for its limitations, the UK government has proposed a sweeping overhaul of the Energy Performance of Buildings framework for England and Wales. The implications are set to reverberate throughout the entire property sector—residential, commercial, public, and private.

From more frequent renewals to the removal of longstanding exemptions, these reforms are more than regulatory housekeeping—they signal a fundamental shift in how building performance is measured, monitored, and managed.

In this article, we explore the details of the proposed changes, examine their rationale, assess their potential impact across the industry, and consider the broader context of the UK’s climate and housing strategy.

Background: Why Reform Now?

Energy used in buildings accounts for around 30% of the UK’s total carbon emissions. Residential homes alone are responsible for roughly 14%, largely due to inefficient insulation and heating systems. With the UK legally committed to reaching net zero carbon emissions by 2050, tackling emissions from the built environment is non-negotiable.

Yet despite the role EPCs play in this effort, criticism has mounted in recent years. Many stakeholders argue that the current system is outdated, inconsistent, and often misleading. EPCs are currently valid for 10 years, regardless of whether the property or its energy usage has changed. Moreover, their reliance on theoretical models rather than real consumption data has led to a “performance gap” that undermines trust.

The government’s December 2024 consultation launched a comprehensive review of the entire Energy Performance of Buildings (EPB) framework. It signalled a clear intention to modernise EPCs, expand their use, and align them more directly with real-world energy savings and decarbonisation goals.

Key Proposals of the Overhaul

1. Shortened Validity Periods

One of the most significant proposed changes is a reduction in the EPC validity period. Currently set at 10 years, the government suggests this could be reduced to as little as 5 or even 2 years, depending on the property type and context.

The intention is to ensure that EPCs reflect current building conditions and technologies, rather than outdated assessments. Frequent updates would capture the effects of improvements, retrofits, degradation, or changes in usage patterns.

This will dramatically increase the frequency with which landlords, property owners, and businesses must commission EPC assessments, creating both new obligations and opportunities.

2. Revised Methodology and Metrics

The government is seeking to replace or supplement existing EPC ratings (based on Energy Efficiency and Environmental Impact) with more nuanced metrics, such as:

• Energy use intensity (EUI): measured in kWh/m²/year
• Carbon performance: a clearer indication of emissions
• Cost-based energy metrics: for clarity on affordability

This would align the UK with international best practice and give occupiers a clearer picture of both environmental and financial implications.

3. Removal or Tightening of Exemptions

Under the current system, several property categories are exempt from EPC requirements—such as some listed buildings, temporary structures, or places of worship. The new proposals seek to:

• Review existing exemptions with a view to narrowing them
• Possibly remove exemptions for listed buildings if energy efficiency upgrades can be done without compromising historical character

This is likely to affect heritage property owners, charities, and sectors like tourism and events that rely on unique or seasonal structures.

4. Enhanced Role of EPCs in Regulation

The reformed EPCs will be used as gateways for access to government schemes, including retrofit grants, green mortgages, and even stamp duty incentives. EPC ratings may also become mandatory reporting items for landlords and developers in planning and building control processes.

Additionally, proposals suggest mandatory EPC updates following major renovations, and more stringent compliance enforcement, including penalties for non-compliance.

5. Sector-Wide Digitalisation

The new framework proposes that EPCs will move to a fully digital format, with centralised updates, open data integration, and real-time access for professionals and consumers alike.

A more connected digital system could, for instance:

• Integrate with smart meters and building management systems
• Allow lenders and investors to assess risk and performance
• Enable automated reminders for EPC renewal

Implications for the Property Sector

The impact of these reforms will be wide-reaching and multifaceted, affecting every part of the property sector—from buy-to-let landlords to large commercial developers.

1. Residential Landlords and Letting Agents

Landlords will be among the most affected. Already under pressure from proposed Minimum Energy Efficiency Standards (MEES) requiring EPC C ratings by 2028, landlords now face:

• More frequent assessments, increasing costs
• Increased compliance checks and penalties
• Less room to claim exemptions, particularly for older buildings
• New demands for evidence-based upgrades (e.g., cavity wall insulation, heat pumps)

Letting agents will also need to be more proactive in ensuring their listings are compliant and that EPCs are up to date.

2. Commercial Real Estate

Commercial landlords and facilities managers will face parallel challenges. Though the EPC framework has long applied to non-domestic buildings, enforcement has historically been weaker.

Now, with calls for energy performance disclosure becoming more common, commercial players may be required to:

• Disclose EUI and emissions publicly
• Undergo EPC renewals every five years or less
• Demonstrate building upgrades in line with public sector tenants or decarbonisation plans

Office buildings, retail parks, and industrial units will all be caught in the net—especially those pursuing ESG (Environmental, Social and Governance) strategies.

3. Surveyors and EPC Assessors

For domestic energy assessors (DEAs) and non-domestic energy assessors (NDEAs), these changes represent both a challenge and an opportunity.

There will likely be:

• Increased demand for assessments due to shortened validity
• More complex evaluation criteria requiring upskilling
• A push toward data-driven assessments incorporating smart tech and on-site monitoring

Industry capacity will need to grow, and quality assurance schemes will become more critical.

4. Housing Associations and Local Authorities

As major property owners and retrofit programme leaders, housing associations will need to reassess their compliance strategies.

For example, they may need:

• Regular EPC audits of social housing stock
• Digital systems to track EPC performance portfolio-wide
• Clear communication strategies with tenants about energy performance

Similarly, local authorities—especially those with declared climate emergencies—will need to align planning, funding, and building regulations with the reformed EPC regime.

5. Mortgage Lenders and Financial Institutions

With EPCs becoming embedded in mortgage decisions, risk profiling, and product eligibility, banks and green finance providers will need to:

• Update systems to account for dynamic EPC ratings
• Adjust affordability models to reflect energy performance
• Offer incentives for verified energy-efficient homes

More frequent and accurate EPCs could drive ‘green premium’ mortgages, but also complicate underwriting for inefficient properties.

Opportunities and Risks

While much of the sector has focused on the cost and complexity of reform, there are significant opportunities as well:

Opportunities

• Upskilling and job creation in energy assessment, retrofitting, and compliance
• Improved market transparency, allowing buyers and tenants to make better-informed decisions
• Increased retrofitting activity, stimulating green jobs and improving living standards
• Greater investor confidence through standardised, reliable performance data

Risks

• Regulatory burden on small landlords and owner-occupiers
• Confusion if reforms are not communicated clearly
• Disruption to property transactions during transition phases
• Potential for rent increases as landlords pass on upgrade costs

A phased, supported transition—especially for vulnerable households and small landlords—will be crucial.

Sector Response and Public Consultation

Initial responses to the government consultation have been mixed. Many professional bodies—such as RICS, the UK Green Building Council, and the Property Energy Professionals Association—support the principle of reform but call for:

• Clear timelines and transitional arrangements
• Adequate training and accreditation for assessors
• Funding support for low-income homeowners
• A greater role for Building Renovation Passports, which track improvement plans over time

The government is expected to publish a response to the consultation in late 2025, followed by a legislative roadmap and updated EPC regulations.

Conclusion: A New Era for EPCs and Energy Accountability

The proposed overhaul of Energy Performance Certificates marks a turning point in the UK’s journey toward greener buildings and a more transparent, data-led property market.

No longer confined to a back-page requirement during property sales, EPCs are poised to become living documents that drive investment decisions, consumer behaviour, compliance regimes, and national energy planning.

But the road ahead will not be smooth. It will require careful calibration, stakeholder buy-in, and ongoing refinement of the system. Above all, it will demand that EPCs evolve from static snapshots to dynamic tools—accurate, accessible, and aligned with the realities of climate change and energy justice.

For now, the message to the sector is clear: prepare for change. The EPC is no longer just a certificate. It’s becoming the foundation of property performance in the 21st century.

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Northants EPC offer Energy Performance Certificates throughout Northampton and the surrounding villages.
We also offer Energy Performance Consultations, with a full report on the energy performance of your property and a working plan to improve your rating.

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