The Scottish Government has fired the starting gun on a significant shift in energy efficiency standards for the Private Rented Sector. But what does this new consultation mean for landlords? Our Energy Expert, Alastair Macphie, explains.
On 6th June the Scottish Government published its Draft Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations consultation. It simultaneously published another consultation on Heat and Energy Efficiency Technical Suitability Assessment (HEETSA). While the first will impose Minimum Energy Efficiency Standards (MEES) on landlords, the second will add further complexity by reforming the way Energy Performance Certificates are produced. These proposals aim to tackle fuel poverty and contribute to Scotland's ambitious net-zero targets, but they come with considerable implications for landlords across the country.
What is the PRS MEES Consultation?
The consultation outlines the Scottish Government's plans to introduce new regulations that will require privately rented homes to meet a minimum energy efficiency standard. This isn't entirely new territory, as previous attempts to legislate in this area were made in 2020 but were withdrawn due to the pandemic. This latest iteration, however, is a renewed and refined effort, building on past feedback and aligning with current climate change and fuel poverty goals.
The core of the proposal centres on an Energy Performance Certificate (EPC) rating of Band C. However, there's a crucial distinction: the Scottish Government is in the process of reforming EPCs, with new regulations expected to take effect from autumn 2026. The reformed EPCs will feature three key metrics: a Heat Retention Rating (HRR), Energy Cost Rating (ECR), and a Heating System Rating (HSR). Critically, the proposed MEES regulations will require properties to achieve a Heat Retention Rating (HRR) of Band C. This means that existing EPC Band C certificates may not be sufficient for compliance under the new system, as the HRR will specifically reflect the fabric energy efficiency of the building (how well its walls, roof, windows, and floor retain heat).
The proposed timeline for compliance is phased, with the new MEES to apply to new tenancies from April 2028, and then all domestic private rented properties to follow in 2033, regardless of when the tenancy began.
What Does This Mean for Landlords?
A Shift in Focus to Heat Retention: Landlords will need to understand that the emphasis is moving to the new Heat Retention Rating (HRR) rather than solely on the current overall EPC rating. This means a focus on improving the building's fabric through measures like insulation upgrades to walls, roofs, and floors, as well as improvements to windows.
Proactive Planning is Essential: With the new EPC system launching in autumn 2026 and new tenancy compliance starting in April 2028, landlords have a relatively tight window to assess their properties and plan for necessary upgrades. Waiting until the last minute could lead to a rush for contractors and increased costs.
Potential for Significant Investment: A significant portion of Scotland's private rented stock currently falls below the proposed Band C standard. Estimates suggest that 48% of properties are currently rated EPC D or lower, with 14% in the lowest E, F, or G bands. Bringing these properties up to the required standard will necessitate financial investment.
Cost Cap and Exemptions: The consultation proposes a cost cap for improvements, with a figure of £10,000 per property being suggested. There will also be exemptions for situations where improvements are technically unsuitable, where necessary consent (from tenants, neighbours, or planning authorities) cannot be obtained, or for temporary periods due to change of ownership.
Enforcement and Penalties: Local authorities will be responsible for monitoring and enforcing the new MEES regulations, utilising data from the EPC Register and PRS property lists. Non-compliance could result in penalties.
Impact on Rental Market Dynamics: While the Scottish Government believes these regulations will improve the quality of housing and potentially attract more tenants, concerns have been raised by landlord associations regarding the potential financial strain on landlords, especially in light of existing rent control measures. There's a risk that some landlords might exit the market if the costs become prohibitive, impacting the supply of rental homes.
Benefits for Tenants: The primary aim of these regulations is to reduce fuel poverty and improve living conditions for tenants by ensuring homes are warmer and more energy-efficient, ultimately leading to lower energy bills.
Next Steps for Landlords
Both consultation periods runs until 29th August 2025, and landlords are strongly encouraged to engage, review the proposed regulations in detail, and submit their feedback. This is a critical opportunity to shape the final legislation and ensure that the voice of the Private Rented Sector is heard.
As the Scottish Government presses ahead with its ambitious energy efficiency targets, proactive engagement and strategic planning will be key for landlords to navigate these significant changes and ensure their properties remain compliant and desirable in the evolving Scottish Private Rented Sector.
At Green Home Systems, we can provide a free portfolio review to landlords that will help assess energy efficiency performance and map out a route to compliance, and also potentially unlock grant funding opportunities to reduce the financial burden. Please contact us if you would like our help.
Green Home Systems - Your Energy Efficiency Experts
Green Home Systems has been operating since 2014 and is one of Scotland’s leading energy efficiency installers. It is an accredited energy efficiency specialist holding multiple industry qualifications and provides a wide range of services including thermal insulation, solar panels and heat pumps. Over the last decade it has completed more than 20,000 retrofit projects, including 10,000 solar panel installations, and unlocked over £50M of grant funding for homeowners and communities.
If you would like more information about Green Home Systems or to speak to a member of the team contact us here.
