Energy Efficiency Upgrades for 2026: What Landlords Should Prioritise

With energy costs remaining stubbornly high and tenant preferences increasingly shifting towards properties that are cheaper to run, 2026 could be a pivotal year for landlords to transition to energy efficient systems. The market is changing rapidly, and those who plan ahead will find themselves with a significant competitive advantage.

The compliance context

The government’s proposed overhaul of the Energy Performance Certificate (EPC) framework, expected to take effect in late 2026, brings a fundamental change to how property efficiency is managed, measured and valued.

The current EPC regulations require rental properties in England and Wales to have a minimum EPC rating of E, with properties rated F or G illegal to let unless a valid exemption is registered. The proposed move to Band C from 2028 is a significant step up in requirements, and landlords should be approaching this strategically and soon, rather than waiting until deadlines loom.

Practical upgrades to maximise savings and tenant appeal

When considering which improvements to make, there are several that offer a bigger impact, so your time and money will go further to enhance energy efficiency and make your rental competitive in the market.

Insulation and building fabric

Insulation is the undisputed champion of energy efficiency measures and central to improving your EPC rating as a landlord. Costs are often more manageable than landlords expect too. Adding to existing insulation to meet the recommended 270mm depth is remarkably cost-effective, typically costing just a few hundred pounds, yet it has the potential to improve EPC scores by several points. For properties without any loft insulation, the improvement can be even more significant.

Wall insulation is another option, but the approach varies depending on the type of property you have. Cavity wall insulation is relatively straightforward for properties built between the 1920s and 1990s, whereas for solid-walled properties, which are common in older housing, external or internal wall insulation is more complex and expensive albeit just as impactful.

Draught proofing

Draught-proofing is the most cost-effective intervention for addressing heat loss and a must for landlords, especially owners of older homes. Sealing gaps around windows, doors, letterboxes, and floorboards costs relatively little but can deliver meaningful improvements in comfort and energy efficiency.

Insulation and draught proofing specialists Mitchell & Dickinson recommend a tailored approach, depending on the age and style of your property for the best results: “Different products and levels of expertise will achieve varying levels of effectiveness…We estimate that [a] full draught proofing service will reduce draughts by approximately 70% in a typical period building.”

Efficient heating systems

Once the foundational elements of the building have been optimised, attention should be turned to the heating system. The new EPC rules are likely to place greater emphasis on heating efficiency and smart systems, making these upgrades increasingly important for compliance as well as tenant satisfaction.

For properties with boilers older than ten years, a replacement should be seriously considered. Modern A-rated condensing boilers are significantly more efficient than older models, and the improvement in EPC rating can be substantial. Under the proposed new metrics, heating system efficiency will become a separate assessment standard, making boiler upgrades even more important for achieving compliance.

A well-maintained boiler is a more efficient one, meaning that regular servicing is also essential. Heating engineers Village Heating explain, “all boilers, regardless of fuel type, should be serviced at least once per year. It is rare that a boiler will require a service more than once a year, typical examples would be an old boiler, a boiler that is used heavily or a boiler brand / model that is known to have issues with certain internal parts.”

Smart readiness

Smart tech is another way landlords can improve efficiency without major changes. Systems like Nest and Hive give tenants the option to remotely manage their heating needs and create schedules that match their lifestyles, while simultaneously reducing waste and lowering their energy bills. When combined with Thermostatic Radiator Valves on each radiator, these systems allow for room-by-room temperature control, ensuring energy isn’t wasted heating up unused spaces.

Funding your energy efficient upgrades

There’s no denying that making these changes can be costly in some cases, but there is substantial government support to help landlords manage the costs. For example, the Energy Company Obligation scheme, currently in its ECO4 phase running until 2026, provides grants for insulation and heating upgrades.

ECO4 primarily targets low-income tenants and properties with EPC ratings of D to G, and it takes a “whole house” retrofit approach, potentially covering measures like loft insulation, cavity wall insulation, external wall insulation, and boiler replacements.

The Boiler Upgrade Scheme offers grants of up to £7,500 for installing low-carbon heating systems such as air source heat pumps or biomass boilers, and is available to landlords throughout England and Wales. It applies per property, meaning landlords with multiple properties can access multiple grants. With the new EPC metrics placing greater emphasis on heating system efficiency and emissions, heat pumps may become increasingly attractive as a compliance strategy.

Strategic planning for success

Given new regulations are looming, getting ahead is the key for anyone in the rental sector. In the short-term, if your property is near to an EPC C rating, you might consider making improvements under the current system before compliance makes it harder to do so in the future. It’s also worth getting your EPC reassessed if you’ve made upgrades since your last assessment, as you might already qualify for a higher EPC score.