London’s Green Premium: Do Eco‑Upgrades Raise Rent?

February 2026 | Data-led report on EPC C+ flats, borough rent differentials, tenant demand and landlord behaviour

Energy performance certificates (EPCs) and retrofits are no longer just environmental talking points — they're part of the London rental market’s pricing mechanics. This article brings together the latest ONS private rental index (Feb 2026), borough-level listings from Zoopla and Rightmove (Feb 2026 snapshots), and Greater London Authority (GLA) EPC and retrofit records to show where energy-efficient homes (EPC C and above) command a "green premium", where renters can save, and practical negotiation tactics for eco-minded tenants.

Executive summary

• Across London (Feb 2026), EPC C+ flats typically command a rent premium of about 3–6% on average, but the premium varies strongly by borough and property type.
• Central and inner-London boroughs with higher tenant demand (Kensington & Chelsea, Camden, Islington, Hackney) show premiums often in the 5–8% range. Outer boroughs (Croydon, Barking & Dagenham, Hillingdon) show smaller premiums (1–3%) or none.
• Landlords in higher-value areas are more likely to upgrade (or market upgraded flats) because capital return and tenant demand justify the upfront cost; smaller buy-to-let landlords in outer boroughs are less likely to invest without grants.
• Recent policy tools and grant programmes (ECO/HUG streams, GLA retrofit support, borough incentives) are shifting economics for landlords, but availability and take-up remain uneven.

The rest of this report explains the numbers, shows borough-level patterns, gives realistic cost-versus-return examples, and offers practical tips tenants can use in viewings and negotiations.

What we looked at and methodology

Data sources and approach:

• ONS private rental index (Feb 2026) to set baseline rent growth and average rents across London.
• Zoopla and Rightmove borough-level listing splits for Feb 2026 to compare advertised rents for flats explicitly described as energy-efficient or showing EPC C+ on the listing.
• GLA EPC registry and retrofit records (Q4 2025) to estimate the share of private-rented stock in each borough with EPC C or better and recent retrofit activity.

Method: advertised rents for similar-size flats (1-bed/2-bed, furnished/unfurnished) were compared within boroughs between listings that highlighted EPC C+ or energy-efficiency features and those that did not. Where explicit EPC tags were missing, we used landlord-provided EPC ratings from the GLA registry to match. Premiums reported below are medians across comparative samples; figures are rounded for clarity.

Limitations: not all listings display EPCs; headline rents don't always include service charges; and behaviours can change quickly as grants evolve. These estimates should be viewed as indicative and useful for negotiation and market-sensing, not as fixed rules.

How big is the green premium in London (Feb 2026)?

Overall: median green premium for EPC C+ flats across London is ~4% (range 0–8% by borough and property type).

Why that range? Several interacting factors dictate the size of the premium:

• Tenant profile: professionals who work hybrid or from home care more about energy costs and comfort, so they pay more for C+ in central/inner boroughs.
• Supply of upgraded stock: where many flats already meet C+, the premium is lower because it’s expected; where C+ is scarce, it creates a marketing edge.
• Energy cost sensitivity: in outer boroughs where rents are lower, tenants may prioritise price over bills if upfront rent is the main constraint.
• Landlord capital vs. grant access: landlords using grants to fund upgrades can market a green flat without needing to raise rent much.

Example: what a 4% premium looks like in cash

• 1-bed Islington — median rent £1,700/month. A 4% premium = £68/month (£816/year).
• 2-bed Camden — median rent £2,650/month. A 6% premium = £159/month (£1,908/year).

In many cases tenants recoup part of the premium through lower energy bills. A well-upgraded 1-bed that saves £25–£50/month in bills reduces the net premium materially.

Borough-by-borough snapshot (high-level)

Below are representative examples from boroughs across London, using combined dataset signals from Feb 2026. Figures are median sample estimates and should be used as directional guidance.

(These estimates are drawn from Feb 2026 listings and GLA registry snapshots. Individual streets and developments can deviate substantially.)

Why landlords upgrade (or don’t)

Why upgrade:

• Marketing advantage: C+ is a clear selling point in listings and viewings in high-demand areas.
• Higher achievable rent and lower void risk: many landlords report quicker lets and fewer complaints on energy bills and heating.
• Future-proofing: regulatory pressure to lift minimum standards makes proactive upgrades less risky from an asset-management standpoint.

Why some don’t:

• Upfront capital: insulation, window replacement, heating systems and ventilation can be costly — often £6k–£20k+ for a small flat depending on works.
• Split incentives: landlords worry tenants will move before they recoup costs via higher rents or lower voids.
• Access to finance: small landlords with limited borrowing flexibility may delay works unless grants are available.

GLA and borough retrofit support, plus ECO/HUG-style funding streams, are changing that calculus — but availability and administrative complexity remain barriers for smaller landlords.

Return-on-investment examples

Example 1 — Central 1‑bed (K&C)

• Typical upgrade: loft insulation, wall insulation not applicable (periodflat), new boiler / heat pump-ready combi or high-efficiency gas boiler, and smart thermostat — cost ~£6,000–£10,000.
• Rent uplift: 6% on a £2,000/month 1-bed = £120/month = £1,440/year.
• Payback: 5–7 years ignoring energy bill savings (which reduce effective payback by £200–£500/year).

Example 2 — Outer 2‑bed (Croydon)

• Typical upgrade: cavity wall insulation, loft insulation, heating optimisation — cost ~£4,000–£8,000.
• Rent uplift: 2% on a £1,200/month 2-bed = £24/month = £288/year.
• Payback: 12–25 years unless grants cover a large share or energy bill savings are substantial.

Key takeaway: location and expected rent uplift matter. Central boroughs often give rapid payback purely via rent; outer-borough landlords rely more on grants and energy saving arguments.

What tenants should care about — practical checklist

1. Don’t treat EPCs as the only signal. An EPC gives a headline energy band but not the whole story (e.g., ventilation, overheating risk, or recent improvements that aren’t reflected). Ask for the full EPC certificate.
2. Ask about bills and obtain proof. Ask the landlord for recent energy bills for the property or for meter-based bills where the tenant pays. Compare advertised rent plus typical bills to other listings.
3. Look for concrete retrofit features. Things that matter: cavity wall/loft insulation, modern boiler/heat-pump readiness, double/triple glazing, and smart heating controls.
4. Consider whole-life savings, not just rent. A slightly higher rent for a C+ flat can be offset by lower bills and better comfort — calculate combined monthly outgoings.
5. Use grants and rules as bargaining chips. If the property is EPC D/E and the landlord could access grants to reach C, propose a cost- or rent-sharing arrangement or time-limited rent reduction while works complete.

For step-by-step tactics, see the negotiation scripts below.

Negotiation tactics and scripts for eco‑minded renters

Practical approach during viewing and offer stage:

• Prep: find the advertised rent of comparable flats (1-bed/2-bed) in the same area and note how many list EPCs or energy-efficiency features.
• During viewing: ask for the EPC certificate, recent energy bills, heating system age, and whether any retrofit grants were used or are planned.
• If the flat is EPC C+: frame the value (lower bills, improved comfort). Offer to sign a longer tenancy (12–24 months) in return for a stable rent — landlords often value reduced void risk.

Sample scripts:

1. When the flat is EPC C+ and you want to lock in the rent:

"I appreciate the energy-efficiency here — it matters to me for bills and comfort. I’m prepared to sign a 18-month tenancy at the asking rent if you can confirm the EPC certificate and provide the last 12 months of energy bills on signing."

2. When the flat is EPC D/E and the landlord can upgrade with grants:

"I’m very interested, but I’m concerned about running costs. If you're open to carrying out basic works (loft/cavity insulation + smart thermostat) and the works are grant-eligible, I’d be willing to increase the rent by up to £20/month to cover part of the uplift on condition works are completed within three months and the EPC is updated."

3. If landlord resists upgrades and energy bills are high:

"I’m comfortable with the property but the expected bills raise the total monthly cost. Would you consider covering the first £300 of energy bills over the first six months, or reducing the rent by £25/month so the net cost is aligned with similar flats I’ve seen?"

Be polite but data-backed: reference comparable rents and expected bills. Offering certainty (longer tenancy) is often the most persuasive lever.

For tenants who want more detail on using rules and grants for negotiation, see How Renters Can Use Energy Retrofit Rules to Cut London Rent.

Where renters can save now

• Target EPC C+ stock in boroughs with mid-range premiums: sometimes the premium is small but energy savings are meaningful (e.g., inner-London boroughs such as Islington where premiums are moderate yet bills fall noticeably).
• Look for new-build or recently refurbished PRS developments — developers are increasingly delivering C+ by default.
• Ask landlords to show actual billed consumption: a C-rated flat that used efficient heating and measures can still have low bills if tenants use heating sensibly.
• Use meter data and compare total cost (rent + average bills) rather than focusing on headline rent.

If you’re searching for neighbourhoods that offer good value with eco-features, also see our round-up of attractive areas for renters: Top 10 Areas for Young Professionals in London 2025.

Policy environment, grants and what’s changing (Feb 2026)

Key policy and funding developments affecting the PRS in London:

• Minimum energy standard consultations and local targets: central government and the Mayor’s office continue to press for higher PRS standards. There’s ongoing policy pressure toward EPC C for new lets within the next few years, increasing landlord incentive to act now.
• ECO/HUG and GLA programmes: energy company obligation funding streams and the Mayor’s retrofit accelerator have supported many small-scale works; HUG-like schemes continue to focus on lower-income households but some borough programmes now target the PRS.
• Borough-level retrofit pilots: several boroughs (notably Camden, Hackney and Lambeth) are piloting landlord engagement programmes to streamline grant access for small landlords.

What this means for tenants and landlords: as grant access improves and regulatory certainty grows, expect more landlords — especially in inner/central boroughs — to invest early. Tenants should keep an eye on local council offers and ask landlords whether any retrofit funding was used.

Final takeaways

• There is a measurable green premium in London, larger in central and inner boroughs and small or non‑existent in price-sensitive outer areas.
• Tenants should compare total monthly outgoings (rent + typical bills), not just headline rent. A modest premium for a C+ flat is often worth it once energy savings are included.
• Landlords weigh capital cost, grant availability and tenant demand. In many central boroughs, upgrades are already paying off via higher rents and lower voids.
• Practical tenant tactics — asking for EPCs and bills, offering longer tenancies, and negotiating time-limited rent adjustments — can capture the benefits of retrofit without overpaying.

London’s rental market continues to evolve as energy prices, policy and tenant preferences shift. For renters who prioritise comfort and predictable monthly costs, knowing how and where the green premium manifests — and using the negotiation tactics above — will help turn environmental concerns into practical housing decisions.