Why North East Landlords Stand to Gain the Most from Going Green
New research from The Mortgage Works has confirmed what many North East landlords have suspected for a while: improving your property's energy rating is not just a compliance exercise. In this part of England, it is one of the most financially rewarding things you can do with a rental property right now.
The Mortgage Works Spring 2026 Private Rental Energy Performance Report pulls together data across England on EPC ratings, property price premiums, rental income, and the cost of upgrades. The results for the North are striking.
You can read the full report here: The Mortgage Works Private Rental Energy Performance Report, Spring 2026.
The North East Leads England on EPC Property Premiums
When a landlord buys a property rated A or B, compared to an equivalent D rated one, how much more do they pay? Across the North of England, the answer is 19.1%. That is the highest figure anywhere in England and it is not particularly close. London comes in at 6.9%, the South of England at 9.4%, the Midlands at 14.3%.
The pattern is clear. Investors in the North recognise that an energy efficient property carries significantly more value, both in terms of what they pay to acquire it and what it returns in income.
Speaking of income, A or B rated properties in the North of England command a 13.3% rental premium over equivalent D rated homes. Again, this is the highest in the country. For context, the same comparison in the South of England produces just a 4.5% uplift, and London sits at 7.3%.
For North East landlords managing portfolios of terraced houses, purpose-built flats, or semis in Newcastle, Sunderland, Durham, or Washington, these numbers should be very interesting indeed.
Upgrade Costs in the North East Are the Lowest in England
This is where the financial case really crystallises. The average cost of upgrading a property from band D (or below) to EPC C in the North East is around £5,100, according to government data from the English Housing Survey (2024). That is the lowest regional figure in England. To put it in perspective:
West Midlands: £8,600
South West: £8,400
East Midlands: £8,300
East of England: £8,000
London: £7,400
North East: £5,100
So the region where upgrades deliver the highest rent premium and the highest property price uplift also happens to be the region where those upgrades cost the least. The report concludes that most landlords in the North are likely to recoup the full cost of improvement within five years, through a combination of higher rental income and increased property value.
That is not the case in the South. The Mortgage Works data shows no meaningful rental uplift in the South of England from moving a property from D to C, and limited property value gains in London relative to the cost of works.
What Kinds of Improvements Tend to Move the Needle?
The most cost-effective ways to improve an EPC rating vary depending on the property, but common upgrades include:
Loft insulation (often one of the cheapest and highest-impact measures)
Cavity wall insulation
Upgrading an older boiler to a modern condensing model
Improving glazing
LED lighting upgrades
It is worth noting that the age of the property matters significantly. Pre-1919 stock typically costs around £10,700 to bring up to band C, roughly double the North East average, because older properties tend to need more substantial work. That said, 32% of the private rented sector nationally falls into this bracket, so if you own older terraces or Victorian stock, it is worth getting an up to date EPC to understand exactly what improvements are needed and what they would cost.
You can check the current EPC rating of any property for free via the official government EPC register.
What About Grants and Funding?
Before reaching for a remortgage to fund works, it is worth understanding what grant support is available. The government's Warm Homes: Local Grant scheme provides landlords with up to £30,000 towards energy improvements on a first rental property (and up to £15,000 at 50% contribution for additional properties), where tenants meet income eligibility criteria. Properties must be rated D, E, F, or G.
The ECO4 scheme (extended until December 2026) allows qualifying landlords whose tenants are on means-tested benefits to access free or subsidised insulation and heating upgrades via energy suppliers.
The Great British Insulation Scheme (also known as ECO+) is open to properties in council tax bands A to D in England, with an EPC of D to G, and can cover cavity wall, solid wall, and loft insulation.
These schemes are worth exploring before committing to full self-funded works, particularly if any of your properties are in areas of higher deprivation where eligibility criteria are easier to meet. Your local authority can often advise on what schemes are currently live in your postcode.
The 2030 MEES Deadline Is Getting Closer
As we covered in more detail in our blog post What landlords need to know about new EPC rules, the government has confirmed that all privately rented properties will need to meet a minimum EPC C rating by 1 October 2030 under the updated Minimum Energy Efficiency Standards (MEES).
The penalty for non-compliance sits at up to £30,000 per breach, per property. That is not a typo.
A couple of points worth flagging:
The EPC system itself is being overhauled. The government is introducing a new Home Energy Model that will assess how well a property retains heat, rather than the current cost-based approach. Any property that achieves an EPC C before 1 October 2029 under the existing system will be treated as compliant until that certificate expires. Properties still rated below C when the 2030 deadline arrives will be assessed under the new methodology, which is expected to be harder to pass.
Acting before 2029 therefore gives you two things: compliance certainty and the option to use a system that many landlords will find more straightforward.
How EPC Ratings Are Changing the Mortgage Market
This is an area we are watching closely. The Mortgage Works data shows that buy-to-let purchasers value energy efficiency far more than owner-occupiers do. An owner-occupier buying an A or B rated property pays around a 1.6% premium over a D rated equivalent. A buy-to-let investor pays 12.2%. That gap tells you something important about how the investment market is thinking about energy performance.
Lenders are beginning to reflect this in their products. Green mortgages, which offer preferential rates (typically 0.1% to 0.5% lower) for properties rated A to C, are becoming more widely available. Some lenders are also starting to factor EPC ratings into risk assessments and affordability calculations, meaning lower-rated properties could face tighter lending criteria at remortgage.
If you are approaching the end of a fixed rate, or thinking about expanding your portfolio, your properties' EPC ratings are increasingly worth considering before you go to market for a new product.
We have a dedicated page on green mortgages if you want to explore how this might apply to your situation.
The Bigger Picture for North East Landlords
The numbers in this report are genuinely compelling for investors in this region. Highest price premiums in England, highest rental premiums, lowest average upgrade costs, and a strong likelihood of recouping investment within five years. Combine that with a regulatory deadline that is only four years away and increasing lender focus on EPC ratings, and the case for acting sooner rather than later is difficult to argue against.
If you want to talk through how EPC changes might affect your buy-to-let mortgage options, whether that is remortgaging to fund works, understanding green product availability, or planning ahead for a portfolio review, our team is here to help. Take a look at our buy-to-let mortgage page or get in touch directly to arrange a conversation.
Further reading:
What landlords need to know about new EPC rules (The Mortgage Dog)
Your home may be repossessed if you do not keep up repayments on your mortgage. Not all buy-to-let mortgages are regulated by the Financial Conduct Authority.
