Landlords and retrofit providers are reacting to this week’s Budget after the government confirmed plans to scrap the Energy Company Obligation (ECO) scheme from March 2026. The £6.5bn programme has been a key route for improving Britain’s coldest and least energy-efficient homes, leaving many in the sector warning of lost jobs, stalled upgrades and financial uncertainty for property owners.
While the Treasury claims the move will shave around £48 a year off household bills, landlord groups say the change jeopardises retrofit momentum at a critical time when EPC minimum standards and net zero compliance remain live policy pressures.
UK retrofit scheme closure raises sector anxiety
The ECO scheme has funded upgrades in some 58,000 homes annually, focusing on low-income households and inefficient EPC-rated properties. According to Ofgem data released in October, ECO has been responsible for the majority of UK retrofit activity for more than a decade.
The NRLA has previously warned that private rented homes will require billions in upgrades if future energy standards are legislated. Landlords already face higher borrowing costs, insurance hikes and limited tax relief, meaning any uncertainty surrounding retrofit funding feels unwelcome.
One Newcastle-based installer, Joel Pearson of Net Zero Renewables, said his firm had already supported more than 200 households through ECO support. He warned the sudden change “risks shutting down viable businesses who are training the very workforce the government will later need.”
A Preston-based retrofit business with more than 150 employees echoed similar concerns, warning that contracts, staffing and planning cycles cannot operate on “cliff-edge government policymaking.”
For landlords contemplating insulation or heat pump installations, the uncertainty may prompt a wait-and-see approach – delaying upgrades and potentially reducing the available installation workforce long-term.
Impact on private rented sector and EPC obligations
While Labour has not reintroduced the previously shelved EPC C deadline for landlords, speculation continues. Industry bodies, including Propertymark and ACE Research, argue that sudden changes to funding create the worst environment for compliance, finance and long-term planning.
For context:
- Retrofitting a semi-detached PRS home to EPC C typically costs between £7,500 and £14,000, depending on insulation condition and heating systems.
- Grants supported up to 60% of costs in some ECO-funded cases.
Removing structured funding risks shifting the full burden back to private landlords and low-income tenants – many of whom live in older stock with stubborn energy inefficiencies.
Anna Moore, founder of retrofit consultancy Domna, described the policy shift as:
“A cliff edge that risks dismantling a decade of skill-building and private-sector delivery capacity at exactly the moment ministers say they want progress.”
Her position is shared across multiple housing and energy bodies, several now lobbying for a one-year extension while the government finalises its replacement scheme, the Warm Homes Plan.
Warm Homes Plan faces slow rollout and delivery gaps
The Warm Homes Plan, intended to replace ECO, has already faced delays due to procurement complexity, with no confirmed operational start date. Experts warn that failing to overlap the schemes creates a “black hole” in activity, investment confidence and supply chain employment.
If delivery stalls, competition for qualified installers may rise sharply once future standards re-emerge – driving up retrofit costs for landlords. That matters because higher EPC standards remain part of the UK’s statutory net zero framework, whether timelines shift or not.
For now, most private landlords are likely to continue monitoring policy movement, seeking specialist finance and delaying major works until clarity returns. Mortgage lenders increasingly price EPC risk into portfolio valuations – meaning today’s uncertainty could feed into tomorrow’s borrowing environment.
Editor’s view
Whether landlords agree with subsidy-linked retrofit or not, one truth is hard to ignore – clarity drives compliance, and uncertainty encourages deferral. Scrapping a major funding pipeline without a ready-to-deploy replacement risks slowing progress, raising installation costs and weakening market confidence. The government intends to help low-income households, but the lack of transition planning undermines that goal.
The question now isn’t whether retrofit matters – it’s whether policymakers can maintain momentum without dismantling the workforce and infrastructure needed to deliver it.
Author: Editorial team – UK landlord and buy-to-let news, policy, and finance.
Published: 27 November 2025
Sources: UK Treasury Budget 2025, Ofgem Household Energy Efficiency Statistics (2025), Employer statements from Net Zero Renewables and Eco Approach, Domna commentary, NRLA position statements.
Related reading: Landlords brace for potential Budget tax changes as retrofit debate grows
