ClimateXChange published a study on 3 April 2025 examining how the proposed Heat in Buildings Bill could affect the Scottish housing market1. The research was carried out by Cambridge Econometrics and completed in July 20242. It models four scenarios against a policy-free baseline, covering the Bill as consulted on, a five-year grace period after purchase, the removal of early action trigger points, and an exemption for first-time buyers1.
The buildings sector in Scotland accounted for approximately 20% of the country's greenhouse gas emissions in 2020, or 8.6 MtCO2e1. The Scottish Government consulted in November 2023 on proposals to make new laws around the energy efficiency of residential buildings and how they are heated2. Those proposals include a minimum energy efficiency standard for owner-occupiers by the end of 2033 and for private landlords by the end of 2028, a prohibition on polluting heating systems after 2045, and an early action trigger point requiring purchasers to end use of polluting heating systems within a grace period of two to five years after completion of the sale2.
The study's scenarios are set out as follows2:
| Scenario | Measures assumed |
|---|---|
| S1-A: Heat in Buildings Bill | All consulted proposals, including two-year grace period after purchase |
| S1-B: Five-year grace period | Same measures, five-year grace period after both trigger points |
| S2: No trigger points | Same measures, early action trigger points removed |
| S3: First-time buyer exemption | Same backstop dates and trigger points, exemption for first-time buyers |
On the rental market, the study states that tenants are likely to bear some of the upfront costs of energy efficiency retrofits in the form of higher rents, and that landlords may decide to exit the market if they do not want to comply with the regulations1. It also finds that extending the grace period to five years is not expected to affect compliance rates compared with a two-year period, but could delay clean heating installation timings, as homeowners often defer action until the deadline1. Removing early action trigger points could postpone compliance and delay emissions savings, and could produce a significant increase in demand for energy-efficient homes around the backstop dates, potentially causing a shortage of energy efficient properties1. The market slowdown under a first-time buyer exemption is described as relatively modest compared with having no exemptions1.
"While implementing the proposals consulted on in the Heat in Buildings Bill ensures earlier compliance with the regulation, it may also result in a slowdown in activity of the Scottish housing market."
The study notes that a first-time buyer exemption from the proposed property purchase trigger point is similar to the 2017 Stamp Duty Land Tax First-time Buyers' Relief in England and Northern Ireland2. It also refers to the rent cap under the Cost of Living (Tenant Protection) (Scotland) Act 2022, which ended on 31 March 2024, and to the New Build Heat Standard, which prohibits the installation of polluting heating systems in new buildings applying for a building warrant from 1 April 20242. The report does not give quantified estimates of price or rent changes, citing data limitations that prevented quantitative assessment2.
Why it matters for households
The proposals sit within Scotland's devolved energy and buildings policy and its wider climate targets. For a household, the study points to two routes by which the rules could reach the wallet: through the cost of buying a home that must be brought up to a minimum standard, and through rent where a landlord passes retrofit costs on1. The finding that a five-year grace period does not change compliance rates but shifts installation later matters for anyone weighing when work gets done, because the deadline, not the purchase, appears to drive the timing1. The study also flags that first-time buyers might still face additional costs to meet minimum energy efficiency standards when buying properties that are not energy efficient1. The report does not state how the standards would be enforced or what support would be available; those details have not been reported here.
What happens next
The study is a research publication, not a government decision. The Heat in Buildings Bill remained a set of consultation proposals at the time of publication, with the minimum standards proposed for the end of 2028 for private landlords and the end of 2033 for owner-occupiers, and the prohibition on polluting heating systems proposed after 20452. The report suggests that deferring or varying deadlines for vulnerable segments of the market, extending grace periods, and pairing regulation with targeted financial support could partially mitigate the market effects it identifies1. No dates for the Bill's introduction are given in the material published on 3 April 20251.