The Scottish Government has proposed new minimum energy efficiency standards for private rented homes, in a significant development for the private rental sector – as a landlord, you need to understand what this would mean for you and your properties.
This guide will outline why new minimum energy efficiency standards for the Scottish Private Rented Sector (PRS) are being proposed and what they are, planned changes to Energy Performance Certificates, and the Scottish Government’s timeline for compliance.
We’ll then look at practical measures that landlords can take now, to aid your financial planning and ensuring future compliance.
Why is the Scottish Government introducing new minimum energy efficiency standards in the PRS?
The Scottish Government has committed to reducing our contribution to global emissions in the fight against climate change, aiming to reach net zero by 2045. It has also committed to reducing fuel poverty; homes which are more energy efficient require less energy to heat, potentially reducing fuel bills.
The Scottish PRS has some of the highest rates of fuel poverty in the country, in corelation with having the highest proportion of the lowest energy efficient properties in Scotland. Overall, Scotland’s homes and workplaces account for about 19% of Scotland’s total emissions, so reducing emissions from our buildings is one of the most important actions we can take to prevent further climate change.
What are the proposed changes to Energy Performance Certificates?
The proposed minimum energy efficiency standards aim to improve the energy performance of Scotland’s housing stock, with ratings measured by a revised Energy Performance Certificate (EPC).
These new EPCs are due to come into force in 2026, and will have three headline ratings:
- Heat Retention Rating (HRR) – this will demonstrate the performance of the building’s fabric (i.e. how well the building retains heat due to insulation and other factors).
- Energy Cost Rating (ECR) – which will be similar to the current ‘Energy Efficiency Rating’ displayed on existing EPCs, and could change as a result of the potential improvement options.
- Heating System Rating (HSR)– which will show whether the installed heating system is polluting, hybrid or clean, and its emissions and efficiency.
What are the proposed new minimum energy efficiency standards for landlords in Scotland?
The proposed minimum standards will require all privately rented properties to achieve a new Energy Performance Certificate (EPC) heat retention rating (HRR) of C, wherever practical. This is a crucial metric for reducing energy waste and lowering heating costs for your tenants.
Proposed timeline for compliance
- From 2028: The new standard must be met for all new tenancies
- By the end of 2033: All privately rented properties will need to comply, regardless of the tenancy start date
This extended timeline provides a valuable window for planning, budgeting for, and implementing upgrades.
To help you prepare, we’ve broken down some of the most effective improvements, estimated costs, and available financial support.
Improving your EPC rating: practical steps and costs
Improving your property’s EPC rating is a strategic investment that not only ensures compliance but also makes your property more attractive to tenants and reduces long-term maintenance costs.
Here are some key measures to improve your EPC rating:
- Insulation
Loft insulation: This is often the most cost-effective way to improve a property’s heat retention. Upgrading from minimal to the recommended thickness can make a significant difference.
- Typical cost: For a standard semi-detached home, professional installation can range from £500 to £1,200.
Wall insulation: This is a major improvement, especially for older properties.
- Cavity wall insulation: If your property has a cavity, filling it can be a relatively straightforward and impactful change.
- Solid wall insulation (external or internal): This is a more extensive and costly project but offers substantial savings.
- Typical cost: Cavity wall insulation can cost around £2,700 for a semi-detached house. External or internal solid wall insulation is a much larger investment, typically ranging from £7,000 to £15,000, but offers the biggest energy savings.
- Heating system upgrades
New condensing boiler: If your property has an old, inefficient boiler, replacing it with a modern A-rated condensing model is a wise investment. Modern boilers are significantly more efficient, reducing gas consumption and lowering running costs.
- Typical cost: The cost of a new boiler installation in Scotland, including parts and labour, typically ranges from £1,800 to £4,500, depending on the boiler type and complexity of the job.
Smart heating controls: Upgrading to smart thermostats and thermostatic radiator valves (TRVs) provides tenants with greater control over their heating, allowing them to heat only the rooms they use. This helps to reduce energy waste and is a key measure for improving a property’s rating.
- Renewable energy integration
Heat pumps: Air source or ground source heat pumps are zero-direct-emissions systems and are a future-proof solution for meeting new standards. They work by extracting heat from the air or ground, providing both heating and hot water.
- Typical cost: An air source heat pump can cost around £14,000 for a new installation.
Solar water heating: This system uses the sun’s energy to provide hot water, supplementing your boiler and significantly reducing energy costs, particularly in the summer.
- Typical cost: A solar water heating system typically costs between £4,000 and £6,000.
Grants and funding for landlords and tenants
The Scottish Government provides several schemes to help with the costs of these upgrades, which are a vital resource for landlords and tenants.
For landlords:
- Private Rented Sector Landlord Loan: This is a Scottish Government-funded, interest-free loan for registered private landlords. It can be used for a wide range of energy efficiency improvements and renewable energy systems. The maximum amount available per property is currently £38,500, with a cap of £100,000 for landlords with up to five properties.
For tenants:
- Warmer Homes Scotland: This scheme is designed to help households struggling with fuel poverty. It offers a range of fully funded energy efficiency measures to homeowners and private tenants who meet certain eligibility criteria, such as those on specific benefits or with low income.
- Home Energy Scotland Grant and Loan: This scheme is open to homeowners in Scotland and provides grants and interest-free loans for installing clean heating systems and energy efficiency measures. Landlords can also access a dedicated version of this support.
For personalised advice, landlords and tenants can contact Home Energy Scotland directly on 0808 808 2282. They can provide a free, impartial assessment of your eligibility for various schemes and help you plan your next steps.
If you need advice on the most appropriate measures for your property, your local trusted plumbing and heating company will be able to help.
