Newcastle City Council’s revised HMO licensing structure is now live, directly linking the cost of a licence to a property’s energy performance. For landlords across the city, this means properties with a low EPC rating will face higher licensing charges, while those that meet or exceed a rating of C will benefit from a discounted rate. The aim is clear, to drive energy efficiency improvements across the private rented sector and support the city’s environmental goals.
Whether you own a small two-bedroom rental or a large HMO, your EPC rating now has a direct impact on your overheads. Here’s what every landlord needs to know.
HMO Licence Fees Now Tied to EPC Ratings
Under the new fee structure introduced in April 2025, properties with an EPC rating of C or above benefit from lower licence fees. Those rated D or below are now subject to an additional £100 charge. This change applies across all three licensing schemes in Newcastle:
Additional Licensing (3 to 4 bedrooms)
£1,000 for EPC C or above
£1,100 for EPC below C
Selective Licensing (2 bedrooms or up to 2 households)
£900 for EPC C or above
£1,000 for EPC below C
Mandatory Licensing (5 or more bedrooms)
£900 for EPC C or above
£1,000 for EPC below C
The policy aims to improve living standards, reduce carbon emissions, and incentivise landlords to take a more proactive approach to sustainability.
Why EPC Ratings Are Now Central to Letting in Newcastle
An EPC rating measures how energy efficient a property is on a scale from A to G, with A being the most efficient. Until now, landlords were only required to meet a minimum rating of E under the national Minimum Energy Efficiency Standards. Newcastle Council has gone further, rewarding those who upgrade to a C or above, rather than only penalising those who fall short.
A better EPC rating means lower energy bills for tenants, less heat loss, and reduced environmental impact. It also signals to prospective tenants that the property is modernised, well maintained, and potentially cheaper to live in.
This move supports long-term sustainability goals while offering landlords a financial reason to invest in energy performance upgrades.
What This Means for Landlords
If your HMO is rated below EPC C, the higher licensing fee will now apply. While £100 may not seem dramatic in isolation, it’s a recurring cost across a portfolio and can add up quickly.
Upgrading your property to EPC C or above unlocks immediate savings, but the benefits go further:
Lower operating costs
Avoid the £100 penalty on every new or renewed licence
Increased tenant demand
Energy efficiency is becoming a key factor for renters, particularly professionals and students
Higher rental values
Modern efficient properties can command premium rent and reduce void periods
Compliance and future-proofing
With energy legislation tightening nationally, upgrading now prevents larger compliance costs later
If your property already has an EPC rating of C or above, now is the time to use it in your marketing. Tenants increasingly prioritise sustainability, and highlighting a high EPC can set your HMO apart.
How to Improve Your EPC Rating
If your current EPC is D or lower, a new assessment may identify cost-effective upgrades that push you into the C bracket. Typical improvements include:
Insulation
Install or upgrade loft and cavity wall insulation to reduce heat loss
Heating system
Replace older boilers with energy-efficient models and add smart controls
Windows
Upgrade to double glazing to improve heat retention and reduce drafts
Lighting
Switch all fittings to LED lighting for immediate gains
Ventilation
Ensure extractor fans and ventilation systems are working efficiently
You may be eligible for financial support through schemes such as ECO or local retrofit funding. Our team can help advise on the best route based on your property and EPC history.
How Bowson Can Help
We work with HMO landlords across Newcastle to help reduce costs and increase return. Our service includes:
Advice on navigating the licensing process
Recommendations for trusted local contractors
EPC assessments and improvement planning
Marketing support to showcase energy efficiency features
Portfolio-wide EPC checks and upgrade strategy
Whether you’re managing a single property or a large investment portfolio, we can help you stay compliant, competitive, and ahead of legislative changes.
Final Thoughts
Newcastle Council’s new licensing rules are now in effect and will impact every landlord operating in the HMO space. Properties with poor energy performance will be penalised, while efficient homes benefit from lower fees and improved marketability. The message is clear, EPC ratings now matter more than ever in the rental sector.
If your EPC is below a C, it’s time to act. A small investment now could save you money, increase your rental income, and help meet future regulatory requirements with ease.
For support with EPC assessments, licensing advice, or energy upgrades, contact Bowson today. We’re here to help you get the most from your HMO investment while meeting Newcastle’s new standards with confidence.
