The Warm Homes Plan and EPC: Everything That Changed in January 2026

In January 2026, the government published the Warm Homes Plan, confirming sweeping changes to EPC regulations for the private rented sector. After years of consultations, U-turns and uncertainty, the rules are now set in law. The headline: every privately rented property in England and Wales must hold an EPC of Band C or above by 1 October 2030, with fines of up to £30,000 per property for non-compliance.

But the Warm Homes Plan did far more than confirm the deadline. It set the cost cap, introduced a new four-metric EPC system, signalled the end of the current SAP methodology, and launched new grant schemes. This guide covers everything that changed and what it means for landlords.

What the Warm Homes Plan announced

The Warm Homes Plan is the government’s overarching strategy for decarbonising home heating and improving energy efficiency across the housing stock. For landlords, the key announcements were:

• Confirmation of the EPC Band C minimum for all privately rented properties from October 2030
• A £10,000 cost cap per property, below the £15,000 originally proposed
• The cost cap is retroactive to October 2025, meaning qualifying improvements made from that date count
• Introduction of a new four-metric EPC rating system to replace the single A–G band
• Confirmation that the Home Energy Model (HEM) will replace the Standard Assessment Procedure (SAP) from October 2029
• Launch of the Warm Homes: Local Grant, a new funding stream for energy efficiency improvements
• Penalties increased from a maximum of £5,000 to £30,000 per property

The confirmed Band C by 2030 requirement

Previous governments proposed and then abandoned EPC minimum standards for private landlords. This time, the legislation is confirmed. From 1 October 2030:

• All new tenancies and tenancy renewals must be for properties with a valid EPC of Band C or above
• Existing tenancies (including periodic tenancies) are covered — the requirement applies to the property, not the tenancy type
• The requirement applies to all privately rented properties in England and Wales, regardless of portfolio size

For a detailed breakdown of the Band C requirement, see our complete guide to EPC Band C requirements for landlords.

The £10,000 cost cap

The 2020 consultation proposed a cost cap of £15,000 per property. The Warm Homes Plan reduced this to £10,000. This means:

• Landlords are only required to spend up to £10,000 of their own money on qualifying energy efficiency improvements per property
• If the property still cannot reach Band C after £10,000 of qualifying spend, the landlord can register an exemption on the PRS Exemptions Register
• The cap is retroactive to 1 October 2025 — qualifying improvements made from that date count towards the £10,000, even though the legislation was confirmed in January 2026
• Government grants (BUS, ECO4, Warm Homes: Local Grant) do not count towards the cap — only your personal expenditure is measured

The £10,000 cap is both a safeguard and a threshold. For most Band D properties, £10,000 is more than enough to reach Band C. For deeper-failing properties (Band E or below), £10,000 may not be sufficient, in which case the exemption route becomes relevant. See our detailed cost cap guide for the full breakdown.

The new four-metric EPC system

Perhaps the most far-reaching change is the plan to overhaul the EPC itself. The current system uses a single energy efficiency rating (A–G) based on estimated energy costs per square metre. The Warm Homes Plan announced a replacement system with four separate metrics:

• Fabric Performance: How well the building envelope (walls, roof, floor, windows) retains heat
• Heating System: The efficiency and carbon intensity of the heating and hot water system
• Smart Readiness: The property’s capacity for smart controls, demand flexibility and integration with the electricity grid
• Energy Cost: The estimated annual energy cost for a standardised occupant

The rationale is straightforward: the current single-metric system rewards cheap gas over genuine energy efficiency. A draughty Victorian terrace with a new condensing boiler can score higher than a well-insulated property with an older heating system, because cheap gas keeps the estimated cost per square metre low. The four-metric system separates fabric from fuel, giving a more honest picture of a building’s actual efficiency.

For a deep dive into the four metrics and what they mean for property improvements, see our guide on the new EPC rating system.

The HEM methodology timeline

The Home Energy Model (HEM) is the calculation engine that will underpin the new EPC system. It replaces the Standard Assessment Procedure (SAP), which has been used since the 1990s. The timeline:

• Late 2026: HEM launches for new-build assessments and begins running alongside SAP for existing dwellings
• 2027–2029: Transitional period where both SAP and HEM assessments are valid
• 1 October 2029: SAP is discontinued for new assessments. All EPCs from this date are produced under HEM
• 1 October 2030: The compliance deadline. Your property must hold a valid Band C (or equivalent) certificate — whether produced under SAP (before October 2029) or HEM (after October 2029)

The practical implication: if you get a SAP-based EPC showing Band C before October 2029, that certificate remains valid for 10 years, covering you well past the 2030 deadline. If you wait, your EPC will be assessed under HEM, which may produce a different (potentially lower) score for the same property. For landlords, the safest strategy is clear: complete improvements and get reassessed under SAP before October 2029.

For the full analysis, see our HEM methodology guide for landlords.

Warm Homes: Local Grant

The Warm Homes Plan introduced a new grant scheme delivered through local authorities:

• One fully funded property per landlord: The scheme covers 100% of improvement costs for the first property each landlord brings to the scheme
• 50% funding for subsequent properties: After the first property, landlords receive 50% grant funding, with the remainder self-funded
• The scheme is delivered through local authorities, so availability and timelines vary by area
• Eligible improvements are similar to ECO4: insulation, heating upgrades, glazing and ventilation

The Warm Homes: Local Grant is a significant new funding stream, particularly for landlords with one or two rental properties. A fully funded first property means you can achieve compliance at zero personal cost — and the improvements delivered still count on your EPC regardless of who paid for them.

What changed from the 2025 consultation

The January 2026 Warm Homes Plan differed from the earlier consultation in several important ways:

• Cost cap reduced: From £15,000 (proposed) to £10,000 (confirmed) — a win for landlords concerned about the financial burden
• Retroactive start date: The cost cap counts spending from October 2025, even though the legislation was not confirmed until January 2026. Landlords who made improvements in Q4 2025 are already building towards their cap.
• Four-metric EPC: The consultation discussed reforming the EPC but did not specify the four-metric structure. This is new and will fundamentally change how properties are assessed.
• Penalties confirmed at £30,000: The consultation proposed this figure, and the Warm Homes Plan confirmed it without change.
• Warm Homes: Local Grant: This funding stream was not part of the original consultation. It is a new mechanism specifically designed to support landlord compliance.

Timeline of key dates