The 8 EPC exemptions available to landlords
Insight from our Director of Operations, Nikki Lewis. Keep up with our latest landlord tips by following him over at The Cardiff Letting Agent.
I've already shared several videos about the new minimum EPC standards, but what about the eight exemptions available to landlords? Who can qualify for them, and what do they mean in practice?
Let's take a look at each of the eight exemptions.
1. The Cost Cap exemption
The one spoken about most is the £10,000 Cost Cap, which includes VAT. Some landlords won't feel like it's much of an exemption because they may still have to spend a lot first, but that's what Government are calling it, so don't shoot the messenger!
When a landlord has spent £10,000 and the property still doesn't meet the minimum standards, they can register a 10-year exemption. However, it's important to understand that this is a cap, not a 'must spend' figure.
For example, if you've already spent £6,000 and met the Fabric Performance requirement, but the next cheapest improvement would cost £5,000 on solar panels, you can stop at £6,000. You don't have to spend the additional £5,000 because that would take you over the cap.
Relevant improvements carried out since 1st October 2025 can count towards the cap, so make sure you keep your evidence and invoices. Until the new system comes in, that basically means work recommended on your existing EPC, except fossil-fuel heating.
It's also worth remembering that Fabric Performance comes first. Spending on Heating System or Smart Readiness improvements won't count towards the cap until you've reached a 'C' for Fabric Performance or registered an exemption against it.
2. The High-Cost exemption
The High-Cost exemption applies where even the cheapest recommended improvement would exceed your applicable cost cap. If that's the case, the property can qualify for a five-year exemption.
Essentially, if the cheapest available improvement would take you over your spending limit, you may not have to carry it out.
3. The 'All Relevant Improvements Made' exemption
This is another five-year exemption. It applies where a property still falls below the required standard, but there are no further recommended improvements available to carry out.
In other words, you've made all the relevant improvements available to you, but the property still doesn't meet the minimum standard.
4. The 'Third-Party Consent' exemption
A lack of third-party consent can also qualify landlords for a five-year exemption. I can see this being particularly relevant to landlords with flats, where a freeholder refuses permission for certain improvement works.
It could also apply where planning permission is refused or a tenant won't allow access to the property. However, there's an important point to be aware of: if the tenant leaves, the exemption ends.
5. The Solid Wall Insulation exemption
This one could be particularly relevant to owners of older properties in Wales. If solid wall insulation is the only thing stopping you from reaching a 'C' for Fabric Performance, you can essentially say: 'I don't want to install it' and register a five-year exemption. You won't even need expert evidence to do so.
However, it's important to understand that this exemption only gets you out of installing solid wall insulation. You'll still need to meet one of the secondary minimum standards, either Heating System or Smart Readiness, unless another exemption applies.
6. The 'Negative Impacts' exemption
This is a 10-year exemption that could be particularly relevant to older, traditionally constructed or listed buildings. It covers situations where certain improvements could damage the fabric, structure or character of the property.
It also applies where carrying out the recommended work would reduce the property's value by more than 5%. However, unlike the Solid Wall Insulation exemption, you'll need evidence to support your application.
7. The 'New Landlord' exemption
New landlords can benefit from a six-month exemption, but there are specific circumstances where this applies. It's only available where someone has just taken whole or partial ownership of a property that already has an existing tenant. This gives the new landlord a period of time before they have to meet the requirements.
8. The 'Affordability' exemption
Finally, there's a 10-year Affordability exemption for lower-value properties. If your property is worth less than £100,000, your maximum spending limit becomes 10% of its value.
For example, if your property is worth £70,000, your cost cap would be £7,000. Once you've reached that amount, or the next cheapest improvement would take you over it, you can register the exemption.
What do these EPC exemptions mean for landlords?
As you can see, there are quite a few circumstances where landlords may not have to spend the full £10,000 or carry out every recommended improvement. However, an exemption doesn't necessarily get you out of everything, and some of the finer details are still to come from Government.
As ever, I'll be keeping a close eye on developments and sharing further updates as we get them.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
