Green heating plans could drive landlords out of Scotland

Scotland’s ambitious plans to phase out gas boilers and switch to green heating systems could see many landlords being forced to leave the country’s private rented sector or pass on the costs to tenants, one critic warns.

The Scottish government is consulting on its Heat in Buildings Strategy, which aims for 22% of energy being from ‘clean’ sources by 2030.

The strategy proposes to ban the installation of new gas boilers from 2025 and require all existing ones to be replaced by low-carbon alternatives such as heat pumps or district heating by 2028.

However, the strategy also warns that building owners who fail to comply with the new standards could face civil penalties, such as fines or restrictions on their mortgages or insurance.

Would have to upgrade the heating system

The strategy also suggests that buyers of properties with polluting heating systems should be required to upgrade them within a fixed period after the sale, which could affect the value of the property.

The Scottish government has allocated £1.8bn over five years to support the transition to green heating but estimates that the total cost could be £32bn, meaning that most homeowners and landlords will have to pay for the change themselves.

The average cost of installing a heat pump is between £10,000 and £12,000, but it could be much higher depending on the size and type of the property.

Devastating impact on the private rented sector

David Alexander, the chief executive of DJ Alexander Scotland, a property management company, said that the plans could have a devastating impact on the private rented sector which accounts for 15% of Scotland’s housing stock.

He said: “Few people disagree with the principle of these initiatives to introduce more green measures into our housing stock.

“It is the timing, the organisation, and the funding which are questionable.”

He added: “A relatively short deadline of five years for the PRS could reduce the number of landlords wanting to stay in the sector.

“Equally, ensuring there is an element of threat in the consultation is unlikely to foster good relations with the sector.”

Landlord exodus will lead to fewer homes to rent

Mr Alexander says that larger investors will remain, but individuals may find the cost burden a step too far and a landlord exodus will, inevitably, lead to fewer homes to rent in Scotland.

He added that the plans could also deter potential buyers from purchasing properties with gas boilers, as they would have to bear the cost and hassle of replacing them within a few years.

The Scottish government said that the consultation was an opportunity for stakeholders to share their views and concerns on the strategy, and that it would consider the feedback before finalising any policy.