WIREDGOV

The Government’s plans to fund energy efficiency improvements in the private rented sector are financially unviable for most landlords, according to new research published by the National Residential Landlords Association (NRLA).

Under the proposals, landlords could be required to invest up to £15,000 per property to meet new energy efficiency standards. However, analysis of polling by independent research consultancy Pegasus finds that, on average, £7,700 worth of investment is the threshold beyond which meeting the Government’s targets becomes unaffordable for landlords.

This comes after the Budget cut total funding for energy efficiency schemes by a quarter over the current parliamentary term, according to think tank E3G.

The NRLA warns the Government it must not rely on the false assumption that landlords are a single class of wealthy individuals with deep pockets to finance improvements.  According to HM Revenue and Customs, the average rental income declared by unincorporated landlords is £19,400 a year – significantly less than what someone earns from a full-time minimum wage salary.

The lack of any bespoke support for the rental market in the Budget to meet the Government’s energy efficiency plans comes despite calls by the Committee on Fuel Poverty for ministers to consider new tax measures to support the investments needed. 

As the sector waits for details of the Government’s final plans, the NRLA calls for all energy efficiency investments to be made deductible against income tax.

 The NRLA also recommends that the cap on the amount landlords will be expected to invest to meet the Government’s new standard should be graduated according to the value of a property. Unless this step is taken there is a very real risk of exacerbating a north-south divide, placing a disproportionately higher financial burden on rental properties in lower-value areas.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“We want all rental properties to be as energy efficient as possible. However, this isn’t going to happen without a serious plan to support the investments needed.

“Relying on the misguided belief that every landlord has limitless reserves to fall back on is not only wrong but will not get tenants any closer to seeing their homes made energy efficient.

“If the Government is serious about its plans, it needs to engage with the sector now to develop a clear, bespoke package to help responsible landlords invest in energy efficiency works. That needs to start by fixing a broken tax system which does nothing to encourage proactive property improvements.”

Notes

• The Government is considering responses to a consultation it has run on new energy efficiency standards in the private rented sector. It includes a proposal to increase to £15,000 the maximum amount a landlord should be required to invest to meet its proposed standards.
• The findings from the landlord research are taken from the Q3 2025 Landlord Trend report from Pegasus Insight based on 872 online interviews with members of the National Residential Landlords Association carried out between 21st September and 9th October 2025. It found that on average landlords anticipate energy efficiency improvements becoming unaffordable at £7,674 per property.
• According to the think tank E3G, the Budget will see total funding for green homes being reduced from £20 billion to £15 billion this Parliamentary term – a cut of a quarter in warm homes funding.
• HMRC data shows that the average rental income declared by unincorporated landlords is £19,400 a year, significantly below what someone would earn in a full-time minimum wage job.
• The Committee on Fuel Poverty notes, that the Government needs to better support landlords to meet its energy efficiency proposals. It has suggested ministers should “consider tax incentives to offset investment, for example, offsetting energy efficiency expenditure incurred in one year, against profits made over several future years. Targeted green financing available to landlords is another potential resource to support landlords to afford the required investment to meet new MEES requirements.”
• Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.
• The NRLA’s press office can be contacted by emailing press@nrla.org.uk or by calling 0300 131 6363.