The £10,000 cost cap is the ceiling on what a landlord can be required to spend getting a rented home to EPC C by 2030. It is not a target, most properties will need nothing like it, and if you genuinely can't reach C within it, a ten-year exemption keeps you letting legally. But the mechanics contain several details that catch people out, starting with the fact that your spend has been counting since October 2025.
Confirmed in the January 2026 Warm Homes Plan response, though legislation is still to follow. It caps required spend on the route to C; once you've spent it (or the next cheapest recommended improvement would take you over it) and the property still can't reach C, you register an exemption and continue letting.
For context on whether it's enough: the government estimates average spend to reach the standard at around £5,400. The English Housing Survey puts the average for a rented home at £6,864, rising to £10,788 for pre-1919 homes and almost £17,000 for F and G rated stock, with around a quarter of homes still needing improvement costing more than the cap. One assessor body estimates 15 to 20% of below-C rented properties will rely on the exemption.
For properties valued below £100,000, the maximum required spend becomes the lower of £10,000 or 10% of the property value, so a £90,000 property carries a £9,000 cap. A qualified surveyor's valuation is required to establish the figure. If you hold lower-value stock, this materially changes your budget.
Qualifying spend on recommended improvements counts from 1 October 2025, backdated, and every pound accumulates: including the cost of the EPC assessment itself and specialist retrofit advice. Grant funding also counts toward the cap, with one exception below. The cap will be reviewed every five years, but not before 1 October 2030.
The practical rule: keep every dated invoice, EPC and before-and-after record from October 2025 onwards. That paper trail is your evidence when registering an exemption later.
If you're budgeting for a heat pump, note the asymmetry: Boiler Upgrade Scheme funding is excluded from the cap even though it cuts your out-of-pocket cost. A £10,000 heat pump with a £7,500 grant leaves only £2,500 counting toward your cap. Other grants, such as the Warm Homes: Local Grant, count in full.
Because compliance under the new rules is a dual test (fabric first, then heating or smart readiness; the detail is in our Home Energy Model guide), exemptions are also per metric. An exemption on one leg does not release you from the other, so a hard-to-treat property may need more than one. The categories:
All exemptions must be formally registered on the PRS MEES Exemptions Register; self-certifying is not sufficient, and registering false or misleading information carries the same maximum penalty as non-compliance: £30,000 per property, per breach. A portfolio approach is also being explored, where larger landlords could pool the cap across properties; watch the 2027 regulations.
Fabric is where they'll cluster: solid-wall homes where insulation isn't feasible or exceeds the cap, properties where wall insulation risks damp, leasehold flats needing freeholder consent, and heritage stock. Heating rarely needs an exemption, because if you can't meet it you simply elect smart readiness instead; the secondary choice is yours. Smart readiness has a built-in safeguard: where a property can't take any recommended smart measure, an unsuitable or overshadowed roof for example, you are not then forced onto the heating standard either.
For deadlines, costs, grants and the full action plan, see the cornerstone guide: EPC rules for landlords: what you need to do now.
Not sure where your property stands? Order an EPC for £95.
Position as at January 2026 policy documents; not yet final law. The precise exemption list and durations will be set in regulations expected in 2027. General guidance, not legal or financial advice.