Warm Homes Plan: Implications for real estate and the private rented sector

The government has finally released its Warm Homes Plan, setting out £15 billion to help millions of households install solar panels, batteries, heat pumps and insulation - all intended to cut bills and accelerate the energy transition. For the property sector, one headline development is confirmation that private rented homes will face stricter minimum energy standards, tied directly to the reform of domestic EPCs.

Minimum standards for PRS

Alongside the Plan, a separate document outlines the details making clear that landlords will be working to a new assessment framework, not the current EPC model, as previously consulted on. Homes will need to meet a primary standard based on the new fabric performance metric, aligned to current EPC C levels, alongside a secondary standard chosen by the landlord, including the smart-readiness or heating-system metric. This gives scope to comply through improved building fabric, smart controls, rooftop solar or a heat pump, rather than a one-size-fits-all approach.

All landlords have until 1 October 2030 to meet the new standards, whether letting to new tenants or existing ones. Properties already rated C or above under the current Energy Efficiency Rating before 1 October 2029 will be treated as compliant for the remaining life of that EPC. Anything below C will trigger the need for a new certificate using the revised metrics so that upgrade decisions are based on accurate data.

The spending cap has been set at £10,000 per property, which is lower than the £15,000 originally proposed, and includes work carried out since October 2025, as well as the cost of getting the EPC itself. The government’s Impact Assessment estimates average upgrade costs at about £5,400, rising to £6,100 in the East of England, with average bill savings forecast at £210 a year. Low-interest loans will be available to support compliance, although detailed rules on the new EPC calculations are still out for consultation.

Alongside the Plan, the government published its partial response to the EPC reform. Domestic EPCs will move to four headline metrics: energy cost, fabric performance, heating system and smart readiness, with separate secondary metrics on energy demand and carbon. Non-domestic EPCs will continue to use a single carbon-based rating. Certificates will remain valid for ten years and will now be required at the point of marketing rather than at sale or let.

While the new framework gives long-awaited clarity, it adds to a decade of regulatory and tax shifts that have already reshaped landlord behaviour. As Oliver Knight, Head of Residential Development Research notes: "The announcement provides a clear and definitive path yet viewed in parallel with other regulatory and tax changes introduced over the last few years it’s difficult to see how the net result won’t be some smaller landlords looking to rationalise portfolios. That will ensure supply remains tight across the rental market and supports a view that rental growth will remain elevated relative to historical performance.”

What else sits within the Plan?

Beyond the private rented sector, the Warm Homes Plan sets out funding for up to five million home upgrades, expanded no-interest and low-interest loans, and increased support for clean heat and heat networks. Solar features prominently, with ambitions to triple rooftop installations, and heat pump deployment is expected to scale significantly through the extended Boiler Upgrade Scheme.

The Boiler Upgrade scheme has seen more than 70,000 redemptions up to November 2025, with 108,000 applications. Uptake has increased significantly in 2025 with a 40% increase in BUS-supported installations in the year to November 2025 compared to the preceding 12 months. The Plan hopes to reach over 450,000 heat pump installations per year by 2030. For reference they note 84,000 were installed in total in 2024, with just shy of 23,000 BUS redemptions paid.

On solar, domestic solar installations reached a record in 2025, surpassing the previous record by October according to MCS. Some 1.6 million homes have solar installed, according to DESNZ latest statistics, as at November 2026, which is 12% higher than the same month in 2025. The Plan states the aim to triple this by deploying panels on up to 3 million more homes. As we noted in our 2023 report Solar Power Value, there are approximately 22.3 million homes across the UK, encompassing detached, semi-detached, and terrace houses – which would see adoption rates of over 20%. With the Future Homes Standard expected to mandate solar for new builds this will likely drive installation figures with MCS noting that new build installations accounted for 35% of the 2025 figures.

The Plan also highlights the creation of 180,000 jobs and £38 billion of investment across the Parliament, supported by area-based delivery and strengthened consumer advice. With much more detail and policy included, particularly on smart flexibility, grid integration and heat networks, there is a lot to digest. But for landlords and investors, the key message is that EPC reform is now locked in, timelines are defined and a fabric-first, performance-led compliance regime will shape decisions from here.

What was absent, other than the continuation of EPC headline metrics and tenure for the non-domestic sector, was any mention or update on the direction for energy efficiency standards for these properties, having waited since the 2021 consultation it looks as if we will have to continuing waiting for this.