The HEEPS Equity Loan Pilot: The Closed Scottish Scheme

The HEEPS Equity Loan was a Scottish Government pilot that let homeowners borrow up to £40,000 against the value of their property to pay for energy efficiency improvements, measures to reduce heat loss and essential repairs. It launched in January 2017 as an area-based scheme in selected parts of Scotland, and it closed to new borrowers in March 2021¹. If you have an equity loan from the pilot still secured on your home, the scheme's closure does not end your loan: the borrowing is repaid when the property is sold or ownership is transferred, and administration of closed Scottish Government schemes sits with Energy Saving Trust².

For anyone hoping to apply today, the answer is straightforward: no new applications are being taken. The pilot was time-limited by design, and the Scottish Government has since built its main householder offer around the Home Energy Scotland Grant and Loan Scheme, which is open to owner-occupiers across the whole country rather than a handful of council areas⁴.

The HEEPS Equity Loan explained

The Home Energy Efficiency Programme for Scotland (HEEPS) was the Scottish Government's umbrella for home energy improvement support, and the equity loan was one strand of it. In January 2017 the Scottish Government launched an area-based pilot equity loan scheme to assist homeowners to carry out energy efficiency works, heat loss reduction and essential repairs¹. The loan allowed homeowners, including private landlords in certain circumstances, to borrow up to £40,000 for eligible works and to repay when the home was sold or ownership was transferred¹.

What made the scheme distinctive was its repayment model. Funding was borrowed against the asset value of the property and there were no ongoing repayments; the householder paid the money back when the property was sold or when the last applicant died². That put it closer to a form of equity release than to a conventional home improvement loan, and it was aimed at households that could not or did not want to take on monthly repayments to fund major works.

The pilot was deliberately narrow in geography. It was available to homeowners or private rented sector landlords in eight local authority areas: Perth and Kinross, Stirling, Dundee, Glasgow City, Inverclyde, Renfrewshire, Argyll and Bute, and the Western Isles². Those areas were chosen to test the model in a mix of urban and island housing markets before any decision on a national rollout.

Why the scheme is no longer open to new applicants

The pilot closed to new borrowers in March 2021, when the Scottish Government's stated window for qualified applicants ended¹. No new equity loans have been issued since. The closure mirrors a wider pattern: several UK home energy finance schemes of the same era have shut their doors, with the Green Deal closed to new applicants⁵ and Green Deal loans described as now closed alongside the Green Homes Grant and the Home Upgrade Grant⁶.

Closure does not affect loans already made. An equity loan taken out under the pilot remains secured against the property on the terms agreed at the time: no ongoing repayments, with the balance falling due when the home is sold or ownership transfers². If you are selling a home with a HEEPS Equity Loan on it, the repayment is settled from the sale proceeds in the same way as any other charge on the title.

How the pilot was run and when

The scheme ran from January 2017 to March 2021, a little over four years¹. It sat within a wider Scottish Government approach that treated home energy improvement as a long programme rather than a one-off: Scotland's energy efficiency infrastructure was framed as a 15 to 20 year programme with multi-year funding, aimed at improving the energy performance of both domestic and non-domestic buildings⁷. The equity loan pilot was one experiment within that longer effort, testing whether property-secured lending could reach homeowners that grants and unsecured loans did not.

Delivery was area-based, meaning the scheme was open only within the eight participating council areas rather than Scotland-wide². That design reflected the wider HEEPS family, in which area-based schemes have been delivered through local authorities, and it allowed the Scottish Government to observe how uptake differed between, for example, Glasgow City and the Western Isles before committing to a national version.

The pilot also ran alongside the development of other Scottish Government programmes. All 32 Scottish local authorities were funded to pilot Local Heat and Energy Efficiency Strategies, the statutory planning layer beneath national retrofit policy⁸, and the Home Report system that underpins Scottish home sales was itself reviewed after its first five years⁹. The equity loan pilot belongs to that same period of testing how Scottish housing policy could drive retrofit at scale.

How much could be borrowed against the £40,000 limit

The headline figure was £40,000: the maximum a household could borrow against the property for eligible works¹. That ceiling was far above most unsecured home improvement lending, and it existed because the works funded were heavy, structural and often bundled together.

The eligible works fell into two broad groups. The first was energy efficiency and heat loss reduction: measures such as insulation, heating controls and other improvements that cut the energy a home wastes¹. Heating controls were explicitly listed among the funded measures¹⁰.

The second group was repairs, and the list was detailed:

• Roof structure, coverings and flashings
• Rainwater goods
• Chimney stacks and heads, including removal
• Work to eradicate rising and penetrating damp
• External wall repairs including finishes
• Active and passive ventilation systems
• Wet and dry rot
• Repairs considered essential to allow an approved measure to be carried out, for example re-wiring needed to allow electrically powered energy efficiency measures to be installed
• Other repairs considered on a case by case basis, not including purely cosmetic work¹⁰

The logic of pairing repairs with efficiency measures was that a home with a failing roof or active rot cannot benefit from insulation, so the loan had to fix the fabric first. The repairs category was not a blank cheque: purely cosmetic work was excluded, and anything outside the listed items was considered case by case¹⁰.

Eligibility rules and why repayment was required

Eligibility had two routes. The loan was available for properties in Council Tax bands A to C, or for properties in all Council Tax bands where the owner was in receipt of qualifying benefits¹. The scheme rules put it the same way from the borrower's side: owners of properties in council tax bands A to C, or owners or permanent occupiers such as partners or children who received the qualifying benefits¹⁰. If any of the permanent occupiers, including the homeowner, their children or partner, or their tenants, received a qualifying benefit, the household could apply¹⁰.

The design targeted the loan at lower-value properties and low-income households across all bands, which is where fuel poverty in Scotland concentrates. It is worth reading the eligibility alongside the wider context: the Scottish Government's fuel poverty strategy recognised that improving energy performance in both domestic and non-domestic buildings was central to tackling fuel poverty⁷.

An equity loan is not a grant, and the difference matters. A grant is money a household keeps; an equity loan is debt secured on the home, repaid from the property's value when it is sold or ownership transfers¹. The trade-off was affordability: no monthly repayments during the loan's life, but the capital, on the terms agreed, comes out of the sale price eventually. For comparison, equity release arrangements elsewhere in UK policy are treated as mortgages: under ECO4 rules, properties with a lifetime mortgage through an equity release scheme are treated the same way as a standard mortgage and categorised as owner-occupied¹¹. Property-secured lending of this kind sits within the mortgage framework, not the grant framework.

Other UK schemes show the contrast in loan design. Cornwall Council's Home Improvement Loan, delivered with a lending partner, helps owner occupiers and private landlords meet the cost of hazard removal, repairs and improvements, with contact through the lender at loans@lendology.org.uk or 01823 461099¹². Swansea's Owner Occupier Loans run from a £1,000 minimum to a £25,000 maximum per property, with loan-to-value caps of up to 80 percent for means-tested cases¹³. The HEEPS Equity Loan's £40,000 ceiling and zero-repayment structure made it a different instrument from any of these.

Who ran the scheme: Energy Saving Trust under contract

Administration of Scottish Government heat and energy efficiency schemes now sits with Energy Saving Trust. EST was awarded a new contract as part of a competitive tender exercise to administer and manage Scottish Government heat and energy efficiency live and closed grant and loan schemes, with the contract starting on 1 December 2023 and an initial term running until November 2026³. The inclusion of closed schemes in that contract is what gives existing equity loan borrowers a continuing point of contact.

The amount paid to EST for administration of the HES Grant and Loan Scheme from December 2023 onwards was withheld under Regulation 10(5)(e) of the Environmental Information Regulations, on grounds of confidentiality of commercial or industrial information³. So the contract's existence and dates are public; its value is not.

Energy Saving Trust also provides free and impartial advice on how to reduce carbon emissions, how to use water more sustainably and how to save money on energy bills, with a helpline number of 0300 123 1234¹⁴. For a borrower with an existing HEEPS Equity Loan, that helpline is the practical route to the team holding the closed scheme's records.

Local advice and the partners involved in delivery

The pilot's area-based design meant it worked through local networks in the eight participating council areas, alongside the Scottish Government's funding and Energy Saving Trust's administration. The scheme rules were published with detailed guidance on eligibility, qualifying benefits and the funded measures, which local partners used to assess households¹⁰.

The local advice layer matters for a scheme like this because equity lending against a home is a significant decision, and the pilot areas included island communities where housing markets and property values behave differently from the central belt. The Western Isles and Argyll and Bute were among the pilot areas², and Scottish islands policy has since emphasised that energy efficiency support must reach island households on equal terms: the Home Energy Scotland Grant and Loan Scheme offers eligible owner-occupiers across Scotland, including in the islands, a standalone grant without credit checks¹⁵.

Advice services continue to carry this role across the UK nations. Energy Saving Trust administers schemes elsewhere too, such as Northern Ireland's Thermal Comfort 2 programme, with oversight provided by the regulator and administration by Energy Saving Trust¹⁶. In England, local authority energy advice services, such as East Herts' Home Energy Support Service on 0800 107 0044 or bhbh@nef.org.uk, show the same pattern of national funding delivered through local advice¹⁷. The equity loan pilot's local delivery partnerships ended with the scheme itself; the advice function for Scottish households now runs through Home Energy Scotland.

The subjects addressed in pilot reporting

The Scottish Government tested the pilot's results before deciding what to do next. It ran a call for evidence on the Home Energy Efficiency Equity Loan pilot and the potential for a national rollout, and published an analysis of responses covering the scheme rules, eligibility and funded measures¹⁰. That analysis is the public record of how the pilot was designed and what stakeholders said about extending it.

The published scheme rules attached to that process set out the full detail a borrower or researcher needs: the repairs list, the heating controls category, the council tax band and benefits routes to eligibility, and the case-by-case treatment of anything not explicitly listed¹⁰. The Scottish Government also publishes freedom of information responses on related loan schemes: an FOI response on the Home Energy Scotland Loan and Cashback Scheme recorded 54 agreed loan funding offers in 2017-18 and 191 offers in 2019-20, showing the scale at which Scottish householder lending was operating in the pilot's later years¹⁸.

No national rollout of the equity loan followed the pilot. Instead, the Scottish Government consolidated householder support into the grant-and-loan model described below, and the equity loan's reports now serve as the record of a tested but abandoned approach.

Current Scottish alternatives and where this scheme fits

Today's main offer for Scottish owner-occupiers is the Home Energy Scotland Grant and Loan Scheme. It is open to all domestic owner-occupiers in Scotland¹⁹, with support open to all owner-occupied domestic households in Scotland²⁰, and it sits within the Heat in Buildings Programme²¹. Unlike the equity loan, it has no geographic restriction and no property-secured borrowing.

Its structure is grants first, loans second. The scheme offers a £7,500 heat pump grant, a £7,500 maximum energy efficiency grant, and an additional £7,500 available as an optional interest-free loan for both heat pump and energy efficiency works¹⁵. The standalone grant is offered without credit checks, and no eligibility criteria are based on age or any other protected characteristic: homeowners access the scheme on an equal basis, as funds last²¹.

The predecessor Home Energy Scotland Loan and Cashback Scheme, now closed, provided up to £15,000 loans with up to £6,000 cashback grant for energy efficiency improvements, and up to £17,500 with £7,500 cashback grant for renewables measures²². Earlier still, the scheme offered owner occupiers up to 40% of their loan, up to a maximum of £6,000, in cashback for certain energy efficiency improvements⁸. The boundaries have shifted over time: Scottish Government funding for replacement oil and LPG heating systems ceased on 6 September 2021, while gas heating systems and their components remained eligible for the loan component¹⁹, and in 2023 solar PV became ineligible under the SME Loan and Cashback scheme to align with the Heat in Buildings Strategy⁴.

For businesses, the SME Loan Scheme provides loans of up to £100,000 for the installation of efficiency measures and renewable technologies⁸, with cashback grants of up to 75% up to £20,000 for energy efficiency measures²³. The public sector equivalent, the Public Sector Energy Efficiency Loans Scheme, provides interest-free loans²⁴. None of these is a direct replacement for the equity loan's property-secured, zero-repayment model, which has no current Scottish equivalent.

Questions around independence

The HEEPS Equity Loan was designed for a specific kind of household independence: it let a homeowner fund major fabric and heating works without monthly repayments, without a commercial lender, and without giving up the works to a supplier-led package. The money came from the Scottish Government, secured against the home's own value, and the household kept the benefit of the improvements while owning the property¹.

The dependence that remained is the one inherent to any equity product: the loan sits on the title until the home is sold, and the state, as lender, holds a claim on the household's largest asset². Borrowers also depended on the scheme's administrator for the life of the loan, which is why Energy Saving Trust's contract covering closed schemes matters to anyone still holding one³. And the works themselves reduced running costs but did not remove the household's dependence on the wider energy system: insulation and heating controls cut demand, but the home still drew on grid electricity or mains gas.

For today's householder, the lesson of the pilot is that Scottish support has moved from property-secured lending toward grants and unsecured loans available to all owner-occupiers¹⁹. That shift trades the equity loan's large single sum for broader access and no charge on the home. Whether a future Scottish Government revives equity-based retrofit finance is an open question; the pilot's own call for evidence was the last formal step in that direction, and no national rollout followed¹⁰.