The £10,000 EPC cost cap is the maximum you, as a landlord, are expected to spend per property on energy efficiency improvements to reach the EPC C standard by 1 October 2030. If you spend up to the cap and the property still falls short of C, you can register an exemption and carry on letting. This guide explains where that figure comes from, what spending counts towards it, how the exemption works, and why the cap is lower for many properties here in Hull and East Yorkshire.
Since the Warm Homes Plan landed in January 2026, the question we hear most from landlords is a simple one: how much is this going to cost me? The cost cap is the government's answer to that worry. It puts a ceiling on your obligation, so you are not facing an open-ended bill to chase a rating that some older properties were never going to reach easily.
Worth knowing up front: the details below come from the government's January 2026 policy response. The headline figures are confirmed, but the supporting legislation is still to follow, so some of the finer mechanics could be refined before 2030.
What is the £10,000 EPC cost cap?
The cost cap is a £10,000 limit (including VAT) on what a landlord must spend per property to meet the EPC C standard. Reach that figure without achieving C, and you can register a cost cap exemption rather than keep spending. It applies per property, and resets on a 10-year cycle.
The figure has moved around during consultation, so it is worth being clear on where it landed:
It is £10,000, reduced from the £15,000 figure the government consulted on earlier.
It is a significant jump from the current £3,500 cap that applies under existing MEES rules.
The government's own estimate puts the average actual spend at around £5,400 per property, well below the ceiling. Many homes will reach C for less.
When does spending start counting towards the cap?
Qualifying spending counts from 1 October 2025. That date is backdated, which means any eligible improvements you have already made since then, or make between now and 2030, are already working towards your total. Work carried out before that date does not count.
This is the single most useful thing for a landlord to grasp early. If you are planning upgrades anyway, keeping the paperwork in order from the outset turns ordinary maintenance into evidence that protects you later.
What counts towards the £10,000 cap?
Only spending on energy efficiency improvements counts, along with the cost of assessing and planning that work. The clearest examples are the fabric and heating measures that move the rating, plus the professional costs that go with them.
Spending that counts includes:
Insulation: loft, cavity wall, solid wall, floor, and room-in-roof.
Heating upgrades, such as a more efficient boiler replacement or a heat pump.
The cost of the EPC assessment itself.
Specialist retrofit advice that informs the improvement work.
It is worth knowing how two key funding routes interact with the cap differently. Funding from the Warm Homes: Local Grant and ECO4 counts towards your £10,000 total, reducing both your outlay and the amount you are still required to spend. Checking what funding you are eligible for before committing your own money is time well spent.
What happens if I spend £10,000 and still don't reach EPC C?
You can register a cost cap exemption. Once you have spent up to the cap on qualifying improvements and the property still falls short of C, you are entitled to register a 10-year exemption and continue letting the property at its current rating. You will need evidence of the work and the spend to do so.
Exemptions are recorded on the PRS Exemptions Register, and the cost cap is only one of several exemption routes. Others cover situations like being unable to obtain the necessary consent, or where improvement work would devalue the property. Each is time-limited and needs supporting evidence, so good records are not optional.
This is also why the penalties matter. From 2030, the maximum fine for non-compliance rises to £30,000 per property, per breach, up from the current £5,000. An exemption you can evidence is your protection against that.
Why the cap is lower for many Hull and East Yorkshire properties
For properties valued under £100,000, the cap is not £10,000. It is 10% of the property's value instead. This is called the Property Value Adjustment, and it matters more here than in most parts of the country, because a large share of local terraced housing sits below that threshold.
In practice, the lower your property's value, the lower your required spend. The table below shows how the cap scales:
|
Property value |
How the cap is set |
Maximum required spend |
|---|---|---|
|
£150,000 |
Flat £10,000 cap (10% would be higher) |
£10,000 |
|
£100,000 |
Flat cap and 10% are equal |
£10,000 |
|
£90,000 |
10% of value |
£9,000 |
|
£70,000 |
10% of value |
£7,000 |
|
£50,000 |
10% of value |
£5,000 |
Figures are illustrative, to show how the adjustment works. Your cap is based on your property's actual assessed value.
With many inner-Hull Victorian and Edwardian terraces valued below the national average, this adjustment is genuinely relevant locally. It can also cut both ways: a lower cap means a lower spending obligation, but solid-wall terraces are often the harder homes to improve, so it pays to know your numbers before you start.
What we see in Hull
Most of the D-rated homes we assess across Hull and East Yorkshire do not need anything close to the full cap to reach C. The common pattern is a handful of targeted measures, loft insulation topped up, heating controls improved, lighting and hot water sorted, rather than one expensive overhaul. The properties that genuinely struggle tend to be solid-wall terraces, where the route to C needs more careful planning.
The mistake we often see is landlords spending before they know their starting point. An accurate EPC, followed by a data review, shows you the cheapest order to make improvements and how close each one gets you to C. That way the money you spend under the cap is money spent in the right place.
What should landlords do now?
Start with an accurate, up-to-date EPC, then plan your spending around it. There is no benefit in waiting, because qualifying spend is already counting from October 2025 and the cheapest improvements are often the first ones identified.
Get a current EPC so you know your real starting rating and the measures recommended for your property.
Keep every invoice, quote, and certificate from October 2025 onwards. This is the evidence that proves you have reached the cap if you ever need an exemption.
Check available grants before spending your own money, since funding counts towards your total and reduces your outlay.
Consider a data review to map the cheapest route to C before committing to any works.
EPC cost cap FAQs
Does the £10,000 cost cap include VAT?
Yes. The £10,000 figure is inclusive of VAT, and it covers qualifying improvement costs along with the EPC assessment and specialist retrofit advice.
Do government grants count towards the cost cap?
It depends on the scheme. Funding from the Warm Homes: Local Grant and ECO4 counts towards your £10,000 cap, reducing how much of your own money you need to spend. The Boiler Upgrade Scheme is different: BUS grants do not count towards the cost cap. You can still use a BUS grant alongside your own spending to install a heat pump, but only the money you personally contribute would count towards your £10,000 total.
What is the cost cap for a property worth less than £100,000?
For properties valued under £100,000, the cap is 10% of the property's value rather than the flat £10,000. A property valued at £70,000, for example, would have a cap of £7,000.
What if I spend up to the cap and still don't reach EPC C?
You can register a cost cap exemption on the PRS Exemptions Register and continue letting at the current rating. You will need evidence of the work carried out and the amount spent. The exemption lasts 10 years.
When does spending start counting towards the cap?
Qualifying spending counts from 1 October 2025. Improvements made before that date do not count, so keeping records from this point forward is important.
The bottom line for landlords
The £10,000 cost cap is designed to limit your exposure, not maximise it. Most homes will reach EPC C for well under the ceiling, the cap is lower again for cheaper properties, and an exemption protects you if your property genuinely cannot get there. The landlords who will find this easiest are the ones who start now: get an accurate EPC, keep the paperwork, and spend in the right order.
Plan your route to EPC C with EPC247
EPC247 is a family-run business based in Hull, with over 10 years of experience helping homeowners, landlords, and agents across the Yorkshire and Humber region. Our accredited, insured assessors know the local housing stock, and our data review service is built to find the cheapest route to a higher rating before you spend a penny on works.
If you are planning for the 2030 deadline, start with an accurate EPC and a clear plan. Book your assessment or data review, or get in touch for a no-obligation chat about your property.
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