The £165M ECO4 fraud that risks collapsing the 2026 Renters’ Database
THE RATIONALS
It is a grey Tuesday in March 2026, and Sarah, a 34-year-old nurse in Salford, opens her inbox to find a message in bold red: “URGENT – Property Verification Failed. Your EPC (C, 2023) cannot be validated. Upload proof of works within 14 days or face £40,000 fine and database ban.” Her landlord, a retired teacher with two buy-to-lets, stares at the screen in disbelief. The “proof” does not exist. The ECO4 insulation was claimed, paid for, and logged, but never verified. The database does not care. It is a machine. It demands data. It does not do mercy. Labour promised to ban no-fault evictions, yet here stands the database-fault eviction, a new invention of bureaucratic zeal.
If you’re a renter or landlord this is your inbox next. The same £165 million fraud that created 23,000 mould homes, already documented here, is now the verification poison that will detonate the Renters’ Rights Bill database in 2026— the Act received Royal Assent on October 27, 2025, cementing the 2026 rollout —with the Public Accounts Committee’s recent testimony confirming the Department for Energy Security and Net Zero’s “limited intervention means” and exposing the absence of any plan for the chaos to come.
The Renters’ Rights Bill database is no mere register, it is a digital inquisition, now law, set to launch in 2026 with an early version potentially arriving before summer, and it will be mandatory for all approximately 4.1 million private rental properties across England. Landlords must submit key data, including the Energy Performance Certificate and proof of works such as MCS certificates, DNO letters, and installation photographs. Non-compliance triggers automatic flagging, with penalties escalating from a £7,000 first fine to £40,000 for repeats, alongside a database ban that renders a property unlettable. Section 8 grounds for eviction, covering sale or repairs, remain exempt from the no-fault ban offering a legal escape hatch for landlords facing ruin. The bill provides no explicit legacy exemptions for prior schemes like ECO4 or the Great British Insulation Scheme, as confirmed in policy guidance and consultations. Awaab’s Law, embedded in the legislation, demands mould fixes within fourteen days, turning every defective ECO4 home into a potential Category 1 hazard. The civil service does not do nuance, it does metadata.
This verification apocalypse begins with a simple rule, an EPC certificate remains valid for ten years, yet the database insists on proof of the underlying works themselves. Across the country, up to 61,500 upgrades delivered under ECO4 and the Great British Insulation Scheme lack that proof, according to aggregated figures from the National Audit Office and Ofgem. Only 2,934 repairs have been completed out of 23,000 needed, leaving councils already grappling with 16,000 verification backlogs.
The maths are merciless. With the database’s demand for evidence across 4.1 million private rentals, these unprovable upgrades could overwhelm councils and prompt thousands of fines and enforcement actions under the bill’s £7,000–£40,000 penalties. The system could grind to a halt, much like the DVLA fining a motorist £40,000 for an MOT performed by a ghost mechanic. The Public Accounts Committee’s testimony highlighted “data gaps in scheme records,” confirming that the department had no strategy to reconcile fraudulent claims with the database’s demand for evidence. Fraud’s legacy is not damp walls, it is digital rejection on a mass scale.
The public execution that follows is not abstract policy wonkery, it is pocketbook pain for six million households, where the ECO4 fraud’s unverifiable upgrades directly sabotage the database’s compliance checks, cascading into evictions, rent surges, and homelessness that no renter or taxpayer can ignore. Start with the fraud’s core betrayal, those up to £165 million in falsified claims inflated EPC ratings to “C” on paper, but without proof of actual insulation or ventilation, the database will flag them as fraudulent information, triggering £7,000–£40,000 fines for “serious offences” like submitting bogus certificates, as the bill explicitly warns. For the average renter say, a family in Manchester scraping by on £2,500 monthly income, this means their “energy-efficient” home suddenly fails the “decent homes” standard, violating Awaab’s Law’s fourteen-day mould fix mandate and forcing landlords to evict via Section 8 grounds for disrepair.
Shelter projects 100,000 additional evictions by 2027 under the bill’s stricter enforcement on poor housing standards, potentially including those from ECO4-defective properties, as landlords, facing repair bills of £8,000–£15,000 per unit, opt for sale to avoid compliance penalties. The outcome? A potential fifteen to twenty per cent supply drop, per the Department’s impact assessment, slamming renters with £300–£500 monthly hikes in hotspots like Manchester or Birmingham, where average rents already top £1,200. Small landlords, numbering around 1.75 million and comprising seventy per cent of the sector, see up to 67 per cent planning exits or reductions due to fears over the Renters’ Rights Bill, potentially trapping many in negative equity while triggering a flood of sales that locks first-time buyers out of an already strained market.
To see the full domino effect, consider the mechanics in plain terms. The ECO4 fraud didn’t just waste money, it created a time bomb inside the EPC system. Many falsified upgrades were logged as “C” or better ratings, but without MCS certificates or installation photos, they fail when the database demands proof. That failure can trigger serious consequences: (1) a civil penalty of up to £7,000 for first offences, escalating to £40,000 for repeats, issued after council investigation; (2) a database ban, meaning the property cannot be legally let until compliant, and (3) a Section 8 eviction notice for disrepair if the home violates Awaab’s Law’s fourteen-day mould fix standard. The landlord, facing re-retrofit costs of £8,000–£15,000 per unit, may choose to sell. The property exits the rental market. Supply drops. Rents rise. With up to 61,500 unverifiable upgrades nationwide, the Department’s impact assessment warns of a potential fifteen to twenty per cent supply reduction, driving rent hikes of £300–£500 per month in high-demand areas. Councils, already managing 16,000 verification backlogs, risk enforcement overload, with thousands of fines and appeals straining courts and homelessness services.
The outcome is not theoretical. Shelter estimates 11,400 households faced bailiff evictions in the 2024/25 fiscal year, with the bill’s enforcement potentially displacing thousands more into temporary accommodation costing £15,000–£20,000 per family yearly. That’s £2.8 billion on the taxpayer tab in 2024/25 alone, funded by the same energy bills that paid for the original fraud. First-time buyers, already priced out, face rising landlord sales up 6.8% in Q2 2025, but at inflated prices due to a 23% supply scarcity. The Warm Homes Plan, Labour’s flagship retrofit scheme, faces challenges from past failures but remains funded at £13.2 billion with no confirmed delays. And net zero 2050 faces hurdles, with up to 16,500 ECO4 installations now non-compliant for emissions counting. The poor are priced out, the middle class fined, and the rich poised to buy the dip. Classic Britain.
The political scandal at the heart of this farce is bipartisan in its incompetence, and bipartisan in its cost. The Conservatives built ECO4 as a self-certification disaster in 2022. The fraud was exposed in late 2024. Labour inherited it in July 2024, got the full NAO briefing in October 2025 and will still launch the database in 2026 with no exemptions. The Public Accounts Committee called it “limited intervention means”, code for no plan, no mercy. Virtue-signalling meets reality and six million households pay the price.
The next horizon is grim for every renter and every landlord. A nurse in Salford could lose her home in 14 days to a database-fault eviction. A retired teacher with two buy-to-lets could face £40,000 in fines and a forced sale into negative equity. Six million households pay in rent hikes, council tax, and temporary accommodation. 1.75 million small landlords pay in re-retrofit costs, void periods, and lost livelihoods. The Warm Homes Plan risks stalling as trust in “free” insulation collapses. Net zero slips further with 16,500 ECO4 homes now void for emissions. Renter anger could wedge the 2026 local elections.
The machine silently ticks on. Britons pay. Both sides lose.
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This article (Your EPC Is a Lie — And It Could Get You Evicted or Bankrupt You) was created and published by The Rationals and is republished here under “Fair Use”
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