The Regulatory Review Group (RRG) wrote to Gillian Martin, Cabinet Secretary for Net Zero and Energy, on 2 May 2025, setting out five recommendations on the Scottish Government's proposals to reform Energy Performance Certificates (EPCs). The recommendations were accepted in a response published on 11 July 2025 by Alasdair Allan, Minister for Climate Action, who replied on the Cabinet Secretary's behalf1.
The RRG's five recommendations covered the interaction between the revised EPC and the Home Report; the risk of unintended consequences for consumers if lenders use the new ratings as lending criteria; working relationships with local authorities; the management and capacity of on-site inspections; and public engagement. Allan wrote that the recommendations were "helpful" and that he was "happy to accept" them1.
"In your letter, you make a series of helpful recommendations, which I am happy to accept."
On mortgage lending, the government accepted the RRG's recommendations on engagement with the financial sector and with the Financial Conduct Authority on Consumer Duty requirements. It pointed to its existing EPC External Reference Group, which includes UK Finance alongside representatives of estate and lettings agents and conveyancing solicitors1.
On enforcement, the government said it has established a small team to lead operational governance of the new regulations, including enforcement by local authorities. The team will be expanded after the regulations come into force through recruitment of auditors and inspectors who will liaise with local enforcement authorities. A short life working group will develop an enforcement "toolkit" and guidance with local government officers, and the penalty charge regime will be reviewed within two years of the regulations coming into force1.
On inspections, the government said resourcing will be funded by EPC lodgement fees, as set out in its technical consultation of February 2025, and will be proportionate to the share of on-site inspections needed to maintain alignment with revisions to the EU Energy Performance of Buildings Directive. The on-site inspections function will be reviewed within two years of the regulations coming into force. Officials are working with the governments of Ireland and Denmark, through their Sustainable Energy Authority and Energy Agency respectively, to benchmark staff capacity and operational system design1.
| RRG recommendation | Government position |
|---|---|
| Interaction with the Home Report | Reforms progressing in parallel with the Home Report review |
| Mortgage lending and consumer risk | Engagement accepted with the financial sector and the FCA |
| Local authority relationships | Existing engagement; enforcement toolkit and guidance planned |
| On-site inspections capacity | Funded by lodgement fees; function to be reviewed within two years |
| Public engagement | Accepted; second phase of consumer user testing under way |
The government said terminology for heating systems is not yet fixed and that a second phase of consumer user testing is under way to refine the language used. It also noted the proposed role of the new rating system in supporting regulations such as a private rented sector minimum energy efficiency standard1.
Why it matters for households
An EPC rating is one of the few energy documents a householder meets directly, at purchase, at rent or at a retrofit decision. The RRG's second recommendation goes to a practical risk: if lenders begin treating the revised ratings as lending criteria, a low rating could affect mortgage eligibility as well as running costs. The government has accepted engagement with lenders and the regulator on that point, but no outcome has been reported1.
The inspection and enforcement arrangements matter because a rating is only as useful as the assessment behind it. Funding inspections through lodgement fees means the cost sits with whoever lodges the certificate, which in most transactions is the seller, landlord or assessor rather than the occupant. The government has not published the fee level1.
For a home's energy independence, the reforms change how a property's efficiency is described and scored, not what it consumes. The government has said the new rating system could underpin a private rented sector minimum energy efficiency standard, which would link the rating to a legal requirement for rented homes1.
What happens next
The regulations are expected to come into force in autumn 2026. The penalty charge regime and the on-site inspections function will each be reviewed within two years of that date. The Minister offered to meet the RRG in summer 2025 to discuss progress, including the proposed Heat in Buildings Bill1.