Scottish Energy Efficiency PRS Regulations now approved

Ministers have approved The Energy Efficiency (Private Rented Property) (Scotland) Regulations 2019 which will come into force on 1 April 2020 and will prescribe a minimum level of energy efficiency from 1 October 2020 for homes in the Scottish Private Rented Sector (PRS).

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The Scottish Government will publish draft guidance on the 1 April 2020 to ensure property owners are aware of what is required to meet with the regulations. ARLA Propertymark will be engaging with the Scottish Government to ensure members have their thoughts put forward to better inform the draft guidance.

It is estimated these proposed changes will improve the standard and fuel efficiency of approximately 68,000 properties in the private rented sector.

The minimum energy efficiency level

From 1 October 2020 all new lets will be required to have a minimum EPC rating of E and as of the 1 April 2022, all new lets must have a minimum EPC rating of D.

The regulations provide that, subject to prescribed exceptions (set out below), a landlord must not grant a new tenancy after 1 October 2020 if the property doesn’t reach the minimum EPC requirements.

Types of exemption:

1) Consent (where a tenant doesn’t allow access to the property)

2) Negative impact on fabric or structure of the property

3) Cost cap (if work to reach the minimum EPC rating exceeds the stated cost caps)

a. During 1 October 2020 to 31 March 2022 would exceed £5,000

b. After 31 March 2022 costs would exceed £10,000

4) Temporary exemption (for six months when a landlord purchases a property)

Enforcement

The regulations will see local authorities enforce these changes in relation to domestic private rented properties. Where an enforcement authority is satisfied that a landlord is in breach, it may issue a penalty notice of up to £5,000.

Our response

In Propertymark’s response to the Scottish Government’s Energy Efficient Scotland consultation in June 2019, we stressed concern over the £5,000 contribution cap being far too high and not affordable for most landlords. With Scotland’s average monthly rental income being £654 (as of December 2019), this would mean that as of 1 October 2020 landlords could see close to 8 months rent spent to meet these regulations.

The regulations have been put in place to improve energy efficiency in private rented homes in Scotland, yet the cap is unaffordable and far too high.

The Scottish Government should be introducing rules that support landlords in the private rented sector to undertake energy efficiency improvements, not introduce unrealistic targets that add fuel to the fire and will force more landlords out of the door.

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David Cox Chief Executive | ARLA Propertymark
Oven, washing machine and fridge appliances positioned next to energy efficiency chart
21 Jun 2019
Energy Efficient Scotland

The Scottish Government asked for views on their proposals for a long-term standard for Scotland’s privately rented and owner occupied homes. Whilst we support improving energy efficiency, we are concerned that the timescales for the private rented sector beyond EPC E are unrealistic.