New Decent Homes Standard Could Cost Landlords £26.5 Billion

Landlords across England could face a combined bill of £26.5 billion to bring private rented homes up to the government’s proposed new Decent Homes Standard, according to recently published government data.

The figures come from the government’s “English Housing Survey Briefing: Modelling a new Decent Homes Standard,” which outlines how much it may cost different housing sectors to comply with tighter housing requirements by 2035.

What the New Decent Homes Standard Will Require

Under the proposed standard, landlords will need to ensure rental properties meet stricter expectations around basic quality and liveability. This includes ensuring homes are in a reasonable state of repair and provide key facilities that meet modern standards.

Requirements include having a properly designed kitchen with adequate space and layout, an appropriately located bathroom and water closet, and sufficient protection from external noise. These measures are intended to improve the overall condition of rented housing and ensure tenants are living in properties that meet consistent minimum standards.

The new model expands on the existing Decent Homes Standard and appears likely to result in a much larger number of properties being classed as failing.

How Will Private Rented Sector Costs Rise

Government modelling estimates that bringing the private rented sector up to the new standard would cost £26.5 billion, which is roughly double the estimated £10.9 billion needed to meet the current standard.

This increase is linked to the broader scope of the updated standard and the larger number of homes expected to fall short under the new criteria.

The modelling also suggests that the proportion of private rented homes considered non-decent would rise sharply. In 2023, around 21% of private rented sector homes were classified as non-decent under the existing standard, equating to roughly 1 million homes. Under the proposed new standard, this figure would rise to 48%, representing around 2.4 million homes.

Will the New Decent Homes Standard Not Affect the Social Housing Sector?

The modelling also estimates that complying with the new standards could cost the social housing sector £11.3 billion.

This is broken down as:

• £4.8 billion applying to local authority dwellings
• £6.5 billion applying to housing association properties

The data indicate this is roughly three times the estimated £3.6 billion required to meet the current Decent Homes Standard, suggesting the new criteria would also create a significantly higher compliance burden for social housing providers.

What’s the Cost Per Property?

While the total projected figures are significant, government data also show that upgrade costs vary considerably across properties.

In the private rented sector, the mean cost per dwelling is similar under both the existing and new standards, sitting at around £11,000 per property. This suggests the increase in total cost is largely driven by a much higher number of homes being classed as failing, rather than a large jump in repair cost per home.

In the social housing sector, the mean cost to meet the new standard is estimated at £5,937 per dwelling, which is actually lower than the mean cost under the current standard, estimated at £8,476 per dwelling. This may indicate that certain homes failing the current standard require more extensive work, whereas the new standard captures a broader range of issues with potentially lower average repair costs.

Standards Push Comes Alongside EPC Targets

These findings come as the government has also confirmed that all private rented and social housing properties will be expected to meet EPC C targets by 2030.

This creates the possibility that landlords may face overlapping upgrade requirements in the coming years, particularly if properties need improvements for both housing quality and energy efficiency compliance.

However, the government has not yet confirmed the exact approach it plans to take to support landlords in meeting these standards, or whether there will be additional grants, exemptions or phased enforcement.

Industry concerns remain that energy efficiency upgrades in particular could lead to substantial costs, especially for older housing stock that requires major work to improve insulation, heating systems or building fabric.

Conclusion

The modelling suggests that the proposed Decent Homes Standard could have a major financial impact across the housing sector, particularly for private landlords, with millions of homes potentially needing upgrades over the next decade.

With the new standard expected to apply alongside EPC improvements, landlords may need to plan ahead for significant compliance requirements while waiting for further clarity on enforcement timelines and government support.