Rental properties with higher energy efficiency ratings are commanding a significant premium in the English private rental market, according to new analysis. Tenants pay an average of £85 per month more for a home rated A or B compared to an equivalent D-rated property, representing an 8.1% premium based on typical rents.
Premium Increases Year-on-Year
The research by The Mortgage Works, part of Nationwide Building Society, found that the premium for A/B-rated properties rose from around £70 per month (7.0%) in 2024 to £85 per month (8.1%) in 2025. This increase reflects growing tenant concern over household bills and energy prices amid global uncertainty.
C-rated properties attract a more modest premium of 1.8% (approximately £20 per month) compared to D-rated homes. Conversely, E-rated properties are typically 1.7% cheaper than D-rated, saving tenants around £18 per month.
Cost of Upgrades for Landlords
Upgrading properties to meet higher standards comes at a cost. For pre-1919 properties, the average expense to reach band C is approximately £10,700. However, newer homes require less investment: properties built between 2003 and 2013 currently rated D-G can be upgraded to C for just £2,500 on average.
The analysis combined government figures with The Mortgage Works' own data. Dan Clinton, head of buy-to-let at The Mortgage Works, said: "Forthcoming minimum energy efficiency standard regulations create a strong incentive for landlords to improve their properties to EPC C so that their portfolio remains sustainable in the long term."
He added: "Given the rental price premiums observed for properties with an EPC A to C rating, alongside the benefits for tenants of living in energy efficient homes, upgrading now seems a logical choice for landlords planning to remain in the rental market beyond 2030."
New Tenant Protections
The findings coincide with the Renters' Rights Act, which came into force on May 1. The Act strengthens tenant protections, including the abolition of Section 21 "no fault" evictions, meaning landlords cannot evict without valid justification. It also regulates rent increases and requires landlords to reasonably consider requests to keep pets.
