The government has announced that by the end of the year it will consult on tightening standards in the private rented sector (PRS) so that these homes would have to meet EPC C by 20301. The announcement was reported by the Energy and Climate Intelligence Unit (ECIU) on 1 October 2024, alongside its analysis of winter energy bills1.
Under Ofgem's new price cap, the typical dual fuel bill rose by 10% to £1,717 on 1 October 20241. The ECIU analysis estimates that even with households cutting gas and electricity demand by 15% and 10% respectively in response, bills this winter are still expected to be 55% higher than before the gas crisis1. A home at EPC band C would pay £903 over the winter under suppressed demand, against £584 before the crisis, while a home at EPC band F would pay £1,288, which is £385 more than band C1. Homes rated EPC D or worse would collectively pay up to £3.7bn more this winter than if they were all rated EPC C, of which £2.4bn would be gas and £1.3bn electricity1. If demand is not suppressed, the ECIU puts the total at £4.2bn, with an EPC F home paying around £1,4501.
The ECIU's Jess Ralston said the case for minimum standards rests on the condition of rented stock:
"This is why government plans for minimum standards for privately rented homes are so important given they are the coldest and dampest properties."
The same analysis states that insulation rates have dropped by over 90% since 2012, after the government rowed back on energy efficiency schemes in 2012-131. It also sets out other measures the government has announced: changes and consolidation of the Local Authority Delivery and Home Upgrade Grant schemes, including a longer delivery window, a simplified application process and wider criteria for the minimum required home improvement, and confirmation that public sector and social housing energy efficiency schemes will continue1. The Labour manifesto commitment to the Warm Homes Plan, which aims to upgrade 5 million homes, is cited1. The ECIU states that further details of low interest loans have not been set out, and that the government has not confirmed whether it will proceed with the Clean Heat Market Mechanism1.
| EPC band | Winter 2024/25 cost per home, suppressed demand | Pre-crisis cost | Extra vs pre-crisis | Extra vs band C |
|---|---|---|---|---|
| C | £903 | £584 | £318 | |
| D | £1,052 | £683 | £368 | £149 |
| E | £1,179 | £768 | £410 | £276 |
| F | £1,288 | £844 | £444 | £385 |
| G | £1,186 | £780 | £406 | £283 |
Source: ECIU1
Why it matters for households
For a household in the private rented sector, the proposed standard would set a floor on the fabric of the home rather than on the bill. The ECIU figures show the size of the gap that floor is intended to close: £385 across a winter between an EPC F home and an EPC C home under suppressed demand, and around £440 at regular demand1. Because a renter cannot commission insulation or glazing at a property they do not own, the MEES standards for rented homes are the main route by which the energy performance of that home changes. The size and condition of the private rented sector therefore determines how many households are exposed to the higher end of the table above. The ECIU also frames the issue in terms of gas demand: improved efficiency means less gas burnt in boilers and less gas needed from international markets1. For a household, that link runs through exposure to wholesale prices rather than through the bill alone. The EPC C target is the benchmark against which the costs in the table are calculated, and the EPC regulations and reform set out how certificates are produced and used.
What happens next
The consultation on PRS standards is due by the end of the year, according to the announcement reported on 1 October 20241. The ECIU states that further details of low interest loans under the Warm Homes Plan have yet to be set out, and that no decision has been confirmed on the Clean Heat Market Mechanism1. It adds that more support may be required to meet the target of 5 million homes with insulation and to boost heat pump uptake1.