Scottish landlords brace for stricter EPC regulations by 2033

Private landlords in Scotland face a big overhaul of energy efficiency requirements, with new proposals mandating that all privately rented homes achieve a minimum standard based on a revised Energy Performance Certificate (EPC) by the end of 2033.

The Scottish Government’s consultation, released recently, outlines a phased approach, requiring new tenancies to comply from April 2028.

Propertymark says it supports the push for greener homes but has raised concerns about the potential strain on landlords.

Landlords under pressure

Its head of policy and campaigns, Timothy Douglas, said: “Any proposals for Minimum Energy Efficiency Standards for the private rented sector in Scotland must be realistic and achievable as well as take into consideration the impact on the supply of much needed homes to rent in rural, island and urban communities.

“Furthermore, policymakers must recognise that landlords in Scotland are not immune to financial challenges from increased mortgage and building costs and will experience further financial challenges with the onset of rent control measures contained in the Housing (Scotland) Bill.”

He added: “We will continue to engage with the Scottish Government to ensure these proposals are evidence based and appropriate for the private rented sector in Scotland.”

New EPC system

The proposals introduce a new Heat Retention Rating (HRR) as part of a reformed EPC system, focusing on a property’s insulation and heating efficiency.

By April 2028, newly let properties must meet HRR band C, with all tenancies following suit by December 2033.

Properties failing to meet this benchmark may be barred from being let unless landlords complete all feasible upgrades or secure exemptions.

Exemptions are proposed for cases where compliance is impractical, such as when third-party consent is withheld, structural damage might occur, or a £10,000 cost cap per property is reached.

Local authorities will enforce compliance, with potential fines of up to £30,000 for non-compliant landlords, aligning with similar measures in England and Wales.

PRS faces challenges

However, Propertymark highlights that Scotland’s private rented sector faces unique challenges, with nearly two-thirds of properties being flats and more than a third built before 1919.

These older buildings often need costly retrofitting to meet modern efficiency standards.

Currently, 52% of PRS homes meet EPC band C, but the new HRR metrics may reclassify some as non-compliant.

The Scottish Government has acknowledged these hurdles and committed to further analysis of how properties will perform under the HRR system.

Propertymark is also warning that without robust support, such as grants, low-interest loans and tailored guidance, landlords may struggle, potentially exiting the market and reducing rental housing availability.