Two-thirds of HMOs covered by new Paragon Bank research already have EPC ratings of A to C, with landlords also reporting that they are stepping up energy-efficiency works while shielding tenants from some of the recent rise in household bills.
The lender said 66% of HMOs owned by surveyed landlords already meet bands A to C, while none of the respondents reported stock in bands F or G. It also found that 28% had already brought forward improvement works because of the proposed shift to a minimum EPC C standard across the private rented sector by 2030.
For landlords, the timing matters because the sector is still waiting for firmer detail on future Minimum Energy Efficiency Standards, yet many HMO operators appear to be spending ahead of any final rule change. That suggests better-rated shared housing may be in a stronger position if compliance deadlines harden over the next few years.
HMO landlords move early on EPC works
Paragon’s figures point to a part of the rental market that is further ahead on energy performance than the wider housing stock. The release said around half of homes nationally currently meet EPC A to C, based on government data, compared with 66% of the HMOs covered by its landlord research.
That gap is notable because HMO landlords often face heavier compliance and maintenance demands than owners of single lets. Shared properties usually need more frequent upgrades, closer management and stronger tenant retention to protect returns. In that context, improving energy performance is not just about future regulation. It can also support void control, tenant demand and bill management in houses where utilities are often bundled into the rent.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said energy efficiency had become a core part of how HMO landlords run their properties. She said many were already ahead of the expected standard and were investing in more efficient homes while, in some cases, absorbing higher energy costs to help keep shared housing affordable.
Pressure on bills still shapes landlord decisions
The same research found that more than four in 10 HMO landlords were absorbing higher energy bills instead of passing those costs on through higher rents. That matters in a part of the market where all-inclusive rent models remain common, leaving landlords directly exposed when energy costs rise.
While the headline finding is positive, landlords should be careful not to treat it as proof that the wider sector is ready for EPC C. Paragon’s sample focuses on HMO operators, who are often more professionalised and may be more likely to invest actively in stock. Smaller landlords with older properties may still face a much tougher funding challenge if firm deadlines and cap rules return.
This follows Landlord Knowledge’s report on poor EPC rentals facing the biggest July bill jump, which highlighted the cost pressure tied to less efficient homes. It also adds to the picture from Landlord Knowledge’s June coverage of rising green-upgrade spending by landlords, suggesting energy works are becoming a mainstream portfolio decision rather than a niche retrofit project.
Landlords can review Paragon’s HMO market research coverage via The Intermediary’s report on the latest findings.
What this means for landlords
- If you run HMOs: stronger EPC ratings may already be giving better-managed shared housing a head start before any 2030 compliance deadline is finalised.
- Watch for: fresh government detail on EPC C targets, spending caps and exemptions, because the economics can still shift quickly for older stock.
- If bills are included in rent: energy-efficiency works may now have a clearer cashflow case, not just a compliance one.
- Bottom line: HMO landlords appear to be moving earlier than the wider market, but the hardest upgrade decisions may still lie ahead for weaker-performing properties.
Editor’s view
This is a useful reminder that the HMO market is not standing still while ministers delay the detail. The landlords who act before the rules are nailed down may be the ones with fewer unpleasant surprises when EPC policy returns to the top of the agenda.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 29 July 2026
Sources: Paragon Bank press release, The Intermediary, Landlord Knowledge archive
Related reading: Rightmove says poor EPC rentals face biggest July bill jump
