Updates
A Shift in How Energy Performance Is Measured
The UK’s Energy Performance Certificate (EPC) system is undergoing its most significant reform since its introduction. The current SAP/RdSAP methodology – which largely reflects running costs based on fuel prices – is set to be replaced by a new calculation engine known as the Home Energy Model (HEM), expected to begin rolling out from late 2026 and into 2027.
This marks a major shift in philosophy.
Historically, properties heated by mains gas have often achieved higher EPC ratings than electrically heated homes due to lower fuel costs. Under the new approach, EPCs will move beyond simple cost modelling to assess the actual performance and future readiness of the building.
The New EPC Framework (HEM)
Future EPCs are expected to present multiple headline metrics rather than a single cost-driven rating. These are likely to include:
- Fabric Performance (FEE) – how well the building retains heat
- Heating System Performance – efficiency and carbon intensity of the heating system
- Smart Readiness – ability to integrate with modern controls and flexible energy use
- Energy Cost – modelled running cost (but no longer the sole driver)
Secondary indicators are expected to include:
- Energy demand (kWh/m²)
- Carbon emissions
In simple terms, EPCs will move from asking:
“How cheap is this home to run?”
to:
“How efficient, low-carbon and future-ready is this home?”
Implications for Heating Systems
Under the current system, replacing an old boiler with a modern A-rated gas boiler has often been the quickest route to achieving EPC Band C.
Under the forthcoming methodology, that may not always be the case.
Low-carbon technologies such as:
- Air source heat pumps
- Heat networks
- Solar PV and smart controls
are likely to play a greater role in achieving higher performance metrics, particularly as the UK electricity grid continues to decarbonise. While gas boilers will not become immediately non-compliant, reliance on fossil fuel heating alone may become less effective for improving ratings in the longer term.
Changes to MEES (Minimum Energy Efficiency Standards)
MEES regulations currently require most rented properties to achieve EPC Band E or above. Government policy has indicated a future trajectory toward Band C for privately rented homes later this decade (subject to final legislation and implementation detail).
This means:
- Many existing Band D properties will require improvement
- Upgrades completed purely to satisfy today’s EPC model may not fully future-proof compliance
- Landlords should consider medium-term retrofit planning rather than short-term fixes
Importantly, EPCs remain valid for 10 years. Properties that already hold a compliant EPC will not automatically become non-compliant overnight when the methodology changes. However, any new EPC lodged under the new system may produce different results for the same property.
Why Early Preparation Matters
Although the new methodology is expected to be introduced from around 2026, the practical compliance horizon is much closer than it appears. For landlords holding property long term, decisions made today – such as installing new heating systems or undertaking major upgrades – will still be influencing EPC outcomes and MEES compliance in 2030 and beyond.
Early planning allows:
- More cost-effective staged upgrades
- Fabric-first improvements that benefit all future metrics
- Avoidance of rushed and expensive retrofit works later
A More Strategic Approach Going Forward
The direction of travel is clear:
Future EPCs will place greater emphasis on building fabric, energy demand and low-carbon heating, rather than simply the cheapest fuel source.
For landlords and managing agents, this means shifting from a reactive mindset:
“What is the cheapest way to reach Band C today?”
to a more strategic one:
“What improvements will keep this property compliant and efficient over the next 10–15 years?”
Key Takeaways
- A new EPC calculation model (HEM) is expected from around 2026–2027
- EPCs will likely include multiple performance metrics, not just cost
- Low-carbon heating and strong fabric performance will become increasingly important
- MEES requirements are expected to tighten toward EPC Band C later this decade
- Early planning and staged retrofit improvements will reduce long-term compliance risk
Final Thought
The upcoming reforms represent a fundamental shift in how property energy performance is assessed. Landlords and agents who begin planning now will be best placed to manage costs, maintain compliance, and protect the long-term value and lettability of their properties in an evolving regulatory landscape.