Landlords: How To Get A Grant To Improve EPC Rating

Over the past few years, UK landlords have seen rising rental income. However, this positive backdrop hides a number of pressures, including sharper rises in operating costs, borrowing costs, and regulatory compliance.

The result is that while many landlords remain profitable on paper, net profit margins are starting to tighten.

For property owners with older properties, this matters because upcoming EPC (Energy Performance Certificate) standards and retrofit requirements will increasingly influence investment decisions, cash flow, and asset value.

Delaying action risks making future property upgrades significantly more expensive.

Before we go any further, let’s take a look at the rental market.

UK Rental Market Overview: Why EPC Standards Now Matter More Than Ever

The UK rental market remains strong, with solid tenant demand and rents continuing to rise, albeit at a slower pace than in recent years. However, headlines that frame the market as stable mask growing pressure on certain landlords’ profit margins.

Operating costs, mortgage interest, insurance, maintenance, and regulatory compliance have increased materially since 2020.

For many landlords, particularly those with mortgaged portfolios or older housing stock, net margins have tightened even where rental income has grown. Cash flow is now more sensitive to interest rates, energy costs, and capital expenditure decisions.

At the same time, supply remains constrained in many regions, supporting occupancy and rental demand. This means well-presented, energy-efficient homes continue to attract tenants quickly and achieve stronger long-term resilience.

This is where EPC standards become commercially relevant.

As minimum EPC requirements tighten toward a C rating later this decade, energy performance increasingly affects:

• A property’s ability to remain legally lettable
• Operating costs and tenant affordability
• Mortgage lending and refinancing criteria
• Long-term asset value and exit strategy
• Future compliance and retrofit exposure

For landlords operating on tighter margins, inefficient properties pose increasing financial risk.

This means delaying upgrades can increase future retrofit costs and restrict letting flexibility.

Conversely, proactive EPC improvements help stabilise running costs, protect asset value, and improve long-term portfolio resilience.

In today’s rental market, an energy efficiency upgrade is a must.

If you’re a landlord looking to reduce this financial burden, applying for grants to improve your EPC rating becomes necessary.

What Grants Can UK Landlords Apply For?

There are numerous routes for landlords to secure financing. Here are the top options for UK homeowners to review:

Warm Homes: Local Grant (England)

The Warm Homes: Local Grant is a UK government-backed programme delivered through local councils in England to help fund energy-efficiency improvements in homes with poor energy performance.

It is part of the broader Warm Homes Plan, which aims to cut bills, reduce fuel poverty, and raise EPC ratings for homes in lower bands.

The grant is fully funded and delivered locally, meaning eligible upgrades are installed at no upfront cost to the household or landlord (in most cases), with councils arranging surveys, approvals, and instalments.

Funding Amounts

Some local authority delivery programmes indicate funding of up to £30,000 per eligible property, depending on local budgets and property suitability.

This broadly reflects two broad pots of funding that can be used together:

• Up to £15,000 toward energy-efficiency measures, including insulation, draught-proofing, heating controls, solar PV, and similar upgrades.
• Up to around £15,000 toward low-carbon heating measures such as heat pumps, where appropriate and suitable to the property.

For landlords with multiple eligible properties, the first property may qualify for the full benefit, while some councils progressively limit grant percentages for additional homes (depending on local delivery rules).

What Upgrades Can Be Funded

Local authorities tailor improvements to each property, but funded works generally include a mix of:

• Cavity, loft, or underfloor insulation
• Draught-proofing and heating controls
• Solar photovoltaic (PV) panels
• Air source heat pumps and other low-carbon heating
• Double or triple glazing where appropriate

These measures are chosen to help bring a property’s EPC rating closer to a target of C, consistent with government retrofit goals.

If you’re wondering what criteria you need to meet, here they are.

Eligibility Criteria

To qualify as a landlord, you need to meet a few requirements, which include:

Property requirements

• The home must be located in England.
• It must have an Energy Performance Certificate (EPC) rating of D, E, F, or G.
• Homes with registered exemptions under PRS regulations (for certain EPC bands) may also be workable in some local schemes, subject to local rules.

Household requirements

• Typically, the household (or tenants) must be low-income (for example, gross household income under approximately £36,000 per year or receipt of means-tested benefits).
• Some local authorities also use postcode-priority criteria, prioritising areas with higher deprivation indicators.

Privately owned properties and privately rented homes where tenants meet the income eligibility criteria can both qualify.

Many councils allow one fully funded property per landlord for low-income tenants, with cost-share contributions required for additional properties beyond that (often 50% from the landlord).

For landlords interested in applying, here’s how.

How To Apply

The first step is to check eligibility on Warm Homes: Local Grant and using any local eligibility check tools.

Contact your local council energy team (many councils have dedicated Warm Homes teams or application pages).

You’ll likely be asked to complete an application and provide your household income and EPC details.

The council arranges a survey of the property before work begins. If your property is approved, the programme will install and fund the upgrades.

Remember that local authorities administer this scheme, and there is no direct central application on gov.uk, as delivery is council-led.

Energy Company Obligation (ECO)

ECO (Energy Company Obligation) was a long-running UK government energy efficiency programme that required large energy suppliers to fund upgrades in eligible homes across Great Britain.

It aimed to tackle fuel poverty, reduce carbon emissions, and improve home energy performance by funding energy-saving measures for homes with poor energy ratings.

The current iteration,ECO4, runs until March 2026 and is gradually transitioning toward replacement schemes delivered through local authorities.

What Measures ECO Could Support

Under ECO4 (and similar predecessor phases), energy suppliers funded a range of measures that helped households and landlords improve the energy efficiency of properties with lower EPC ratings.

These typically involve financial support for electrification and low-carbon heating solutions, such as heat pumps, where eligibility criteria are met.

Which in turn, helps replace older gas, electric, or oil heating systems with more efficient electric heat pumps.

Additionally, the ECO grant helps improve heating efficiency by upgrading to more efficient heating systems, controls, and thermostats, reducing energy waste and lowering bills.

Also, ECO supports insulation upgrades, including loft, cavity wall, and internal wall insulation, draught-proofing, and, in some cases, solar PV, to reduce heat loss.

These measures work especially well in tandem with heat pump installations to raise overall property efficiency. Also, help keep homes cooler in hotter months.

Overall, funded works are designed to reduce energy use, improve comfort, and bring low-performing homes closer to EPC compliance.

Who Typically Qualified

ECO support was targeted at households with low incomes, receiving qualifying benefits, or in fuel poverty.

Eligibility often required:

• Household members receiving income-related benefits such as Universal Credit, Pension Credit, Income Support, and similar.
• Vulnerable occupants (e.g., due to age, health needs) in some local flex eligibility arrangements.
• A property with a lower EPC rating (often D, E, F or G), signalling poor energy performance.

For private-rented properties, landlords could sometimes access ECO measures when tenants met the qualifying criteria and consented to the work.

This makes the scheme especially valuable for social housing and lower-income rental stock.

How It Works In Practice

ECO didn’t operate like a traditional grant application on gov.uk.

Instead, energy suppliers were obligated to deliver funded measures as part of their regulatory duties.

Eligible households or landlords could arrange a survey through an approved installer or community partner, and the supplier would cover the cost of qualifying works.

Because it was funded through energy company obligations rather than direct government grants, ECO support was popular with renters and landlords where tenants were vulnerable or on low incomes, and where measures could dramatically cut energy use.

What other grants can landlords apply for to get financial help?

Boiler Upgrade Scheme (BUS)

The BUS provides upfront capital grants for low-carbon heating systems that replace fossil fuel heating (like gas or oil boilers).

You can receive one grant per property you own, including rental properties.

Under the standard scheme, the main available grants are:

• £7,500 towards air-source or ground-source heat pumps designed for whole-home heating (and often hot water) systems.
• £5,000 towards a biomass boiler (less common for landlords).

These grants are accessed through an MCS-certified installer, who will apply on your behalf and provide an upfront discount on the quote.

Can The Bus Fund Air Conditioning?

Modern air-to-air heat pump systems (don’t call them air conditioning units) that provide both heating and cooling may qualify for a specific BUS grant when technical and installer criteria are met.

The updated scheme rules now include a £2,500 grant for air-to-air heat pumps, which cool in summer and heat efficiently in winter.

Because these units are technically heat pumps (moving heat rather than generating it), they are classified as a low-carbon heating technology, making them eligible for a smaller BUS grant than whole-home heat pumps.

This means that, as a landlord, if your property can accommodate an air-to-air heat pump instead of a traditional fossil-fuel boiler, both heating and cooling costs can be partially funded.

Key Eligibility Notes For Landlords

You can apply as a landlord because BUS is open to property owners, not just owner-occupiers.

Eligible properties must be in England or Wales and have a valid EPC (heat pump installations must also meet installer certification requirements, such as MCS).

However:

• Grants are not automatic, as your installer must submit the BUS application on your behalf.
• You can claim only one grant per property, so choosing between a full heat pump and an air-to-air unit affects the amount you can claim.

VAT Relief (England, Scotland & Wales)

The UK government has introduced a temporary zero-rate VAT break on a range of energy-saving materials and installation work to make energy efficiency upgrades more affordable.

This includes items such as:

• heat pumps
• insulation
• solar panels
• relevant fabric improvements

This is part of a broader policy to reduce energy costs and cut carbon emissions.

What The VAT Relief Means

Until at least 31 March 2027, Zero VAT (0%) applies to the supply and installation of qualifying energy-saving materials in residential accommodation.

This includes landlord-owned homes, provided the installer supplies and installs the system.

Additionally, this means the VAT portion (usually 20%) is removed from the price of both the equipment and the installation for eligible measures, significantly reducing upfront costs.

After March 2027, these installations are expected to revert to a reduced VAT rate (5%) unless the relief is extended.

This means you need to hurry, as it significantly reduces the cost of installing a heat pump-style AC system compared with the standard 20% VAT rate.

However, if you’re a landlord interested in converting your property’s heating system to an air-to-air heating system but don’t qualify for financial help, you can always finance the upgrade.

Finance Your WarmZilla Air Conditioning Installation

Not sure which air conditioning system your property needs?

Our free air-conditioning survey helps you understand the right system for your space, energy efficiency goals, and budget.

You’ll also be matched with vetted local engineers who can provide tailored quotes and installation advice.

Finance options are available to help spread the cost of your upgrade.

Frequently Asked Questions

Can Landlords Apply For Energy Efficiency Grants On Rental Properties?

Yes. Many schemes allow landlords to apply where the property meets EPC criteria and, in some cases, where tenants meet income or vulnerability requirements. Eligibility and funding levels vary by location and scheme.

Can Air Conditioning Upgrades Qualify For Grant Funding Or VAT Relief?

Air-to-air heat pump systems, which provide both heating and cooling, may qualify under certain grant schemes and benefit from zero-rate VAT when installed as qualifying energy-saving equipment. Standard cooling-only air conditioners typically do not qualify.

What Happens If A Rental Property Does Not Meet Future EPC Standards?

Properties that fail to meet minimum EPC requirements may face letting restrictions, reduced mortgage options, and higher retrofit costs over time, making early upgrades financially tough.