The Minister for Climate Action, Alasdair Allan, accepted the Regulatory Review Group's recommendations on Energy Performance Certificate reform in a letter published on 11 July 2025. The letter responds to the Group's advice of 2 May 2025 to Gillian Martin, Cabinet Secretary for Net Zero and Energy, and covers the Scottish Government's final proposals for EPC reform set out in its January 2025 response to the 2023 public consultation1.
"In your letter, you make a series of helpful recommendations, which I am happy to accept."
On the Home Report, the letter states that EPC reforms are progressing in parallel with the Home Report review and have been discussed with external experts advising on that review. On mortgage lending, the minister accepted recommendations to engage with the financial sector on links between EPC ratings and mortgage eligibility, and with the Financial Conduct Authority on Consumer Duty requirements. The Scottish Government's EPC External Reference Group already includes UK Finance, alongside representatives of estate and lettings agents and conveyancing solicitors1.
For implementation, a small team already leads on operational governance of the new regulations, including enforcement by local 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 force. Once the regulations are in force, expected in autumn 2026, the team will be expanded with auditors and inspectors who will liaise with local authority enforcement teams1.
On inspections, resourcing will be funded by EPC lodgement fees, as set out in the February 2025 technical consultation, 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, to benchmark staff capacity and operational systems1.
On public engagement, the minister accepted the recommendation in full, noting its importance given the role the new rating system could play in supporting proposed regulations such as a private rented sector minimum energy efficiency standard. Terminology for heating systems is not yet fixed, and a second phase of consumer user testing is under way to refine the language1.
| Recommendation area | Commitment |
|---|---|
| Home Report | Continued alignment; reforms progress in parallel with the Home Report review |
| Mortgage sector | Engagement with lenders and the FCA on Consumer Duty |
| Local authorities | Enforcement toolkit; penalty charge regime reviewed within two years |
| On-site inspections | Funded by lodgement fees; function reviewed within two years |
| Public engagement | Second phase of consumer user testing on terminology |
Why it matters for households
An EPC is part of the Home Report that sellers in Scotland must provide, so changes to the rating system reach buyers, sellers and renters alike. The accepted recommendations touch on two areas with direct household consequences: whether lenders might treat revised ratings as lending criteria, and how clearly the new terminology explains a home's heating system. The letter confirms that the rating system could underpin a future private rented sector minimum energy efficiency standard, which would set a floor for rented homes. For owner-occupiers, the practical effect depends on regulations not yet in force. The detail of Scotland's housing stock and EPC ratings shapes how many homes are affected, and the reforms sit within the wider framework of energy and buildings policy in Scotland.
What happens next
The regulations are expected in autumn 2026. The penalty charge regime and the on-site inspections function will each be reviewed within two years of the regulations coming into force. The minister offered to meet the Regulatory Review Group in summer to discuss progress, including the proposed Heat in Buildings Bill1.