The Scottish Government has set out proposals that would require all homes in the private rented sector to reach an Energy Performance Certificate (EPC) rating of at least E by a backstop date of 31 March 2022, under a consultation published alongside a partial Business and Regulatory Impact Assessment in April 20171. The same document proposes raising the standard at the point of rental to EPC D from 1 April 2022, with all private rented properties required to reach D by 31 March 20251.
The proposed trajectory has two stages. From 1 April 2019, private rented properties would need an EPC of at least E at the point of rental, or would need to have had an assessment carried out before rental and be improved within six months1. By 30 September 2021, properties still below E would need a minimum standards assessment carried out and lodged, ahead of the 31 March 2022 backstop1.
| Date | Proposed requirement |
|---|---|
| 1 April 2019 | EPC of at least E at point of rental, or assessment before rental with improvement within six months1 |
| 30 September 2021 | Minimum standards assessment carried out and lodged for properties still below E1 |
| 31 March 2022 | All private rented dwellings to have achieved EPC E1 |
| 1 April 2022 | Minimum standard at point of rental raised to EPC D1 |
| 31 March 2025 | All private rented dwellings to have achieved EPC D1 |
The assessment estimates that somewhere in the region of 100,000 dwellings would ultimately need to be upgraded because of the regulations1. It puts an allowance of £140 for the cost of an assessment report, uses a factor of 10% of the upgrade cost, and assumes an average cost of £70 in its modelling1. Costs and benefits are calculated over 40 years, using a real rate of 3.5% for the first 30 years and 3% for years 31 to 401. It also assumes that 15% of the benefit of modelled fuel bill savings is taken instead as greater thermal comfort1.
The proposals sit within wider Scottish targets. The Climate Change (Scotland) Act 2009 sets a target of an 80% reduction in greenhouse gas emissions on 1990 levels by 20501. Emissions from the residential sector represented 12.6% of total direct emissions in 2014, and had fallen by 26% between 1990 and 20141. The Scottish Government published its draft Climate Change Plan on 19 January 2017, setting out policies and proposals to reduce emissions during the period 2017 to 20321. On fuel poverty, the Minister for Local Government and Housing advised Parliament in June 2016 that the aim of ensuring that, so far as is reasonably practicable, people were not living in fuel poverty in Scotland by November 2016 would not be achieved by that date1.
"The consultation proposes a minimum energy efficiency standard for homes in the private rented sector."
Why it matters for households
For a tenant, the proposed standard bears on the fabric of the home rather than the tenancy terms: a dwelling reaching EPC E, and later D, is one that needs less energy to keep warm, which affects running costs and how much of a household's comfort depends on the grid and on whatever heating system the property has. The assessment links dwelling energy efficiency with fuel poverty, noting that the energy efficiency of a dwelling is strongly correlated with whether households are in fuel poverty1. It records that an estimated 748,000 households, or 30.7% of all households, were in fuel poverty in 2015, almost 100,000 fewer than in 2014, when 845,000 households (34.9%) were in fuel poverty1.
For owners of rented property, the proposals imply assessment and upgrade work on a defined timetable, with the assessment document modelling a cost cap and per-property cost assumptions1. The Scottish Ministers also stated an intention to consult from winter 2017/18 on energy efficiency in the owner-occupier sector, so the position for owner-occupiers is separate and, as of this document, not yet set1.
What happens next
The document is a consultation and partial impact assessment, so the trajectory described is proposed rather than settled. It states that Scottish Ministers intend to consult from winter 2017/18 on energy efficiency in the owner-occupier sector1. A review of the fuel poverty definition was expected to be completed by late summer 2017, with consultation on a new fuel poverty strategy, including a new fuel poverty target, before the end of 20171.