Without meaningful support, there is a risk that landlords may exit the sector, worsening the already critical shortage of private rented homes. These regulations are being introduced under powers in the Energy Act 2011, with a new EPC system due to be laid before Parliament in Autumn 2025 and coming into force the following year.
Exemption made clear and funding available
We recommend that the backstop date be moved from 2033 to 2035 and the start date for new tenancies pushed from 2028 to 2030 to avoid bottlenecks and inflated costs. Clear exemptions for properties that cannot realistically meet Band C, including listed buildings, conservation area homes, ground floor flats and properties in rural or island communities, are needed.
Temporary exemptions should also last at least 12 months, not six, to reflect long waits for skilled trades and to allow new landlords sufficient time after inheriting or purchasing a property.
Funding arrangements must also improve. The £10,000 per property cost cap is unrealistic without grant support, loan schemes are poorly promoted and unattractive, and ECO funding should be redirected from the social sector into the PRS.
Propertymark members surveyed in August 2025 reported that none of the landlords they worked with had taken advantage of the PRS Landlord Loan, citing low awareness, rejected applications, and concerns about repayment terms.
Expenditure on energy efficiency improvements should count towards any cost cap where it took place up to twelve months before the regulations come into force.
Propertymark has consistently stated that without meaningful support, landlords may pass costs on to tenants or leave the sector entirely. Those making genuine efforts to upgrade should also be exempt from rent controls under the Housing (Scotland) Bill.
Fairness across the rental sector
We welcomed proposals to exclude crofters, small landholders and agricultural holdings from the rules, given the nature of those tenancies. However, we continued to highlight concerns about excluding short-term holiday lets altogether.
Fairness returns as holiday let tax breaks scrapped
HMRC is abolishing tax breaks for furnished holiday lets (FHLs) to take effect from April 2025, bringing in an extra £35 million to the exchequer in the first year. Propertymark has long called for parity between short-term and residential letting, and we welcome this move towards greater balance in the market.
Members warned that if holiday lets are exempt while long-term landlords must comply, investment could be pushed further into the holiday let sector, worsening the shortage of PRS homes. Distinguishing between rural and urban short-term lets is essential, and the latter is included in the regulations due to their higher energy use and the impact on cities' supply.
Tougher energy standards incoming for landlords in Scotland
Proposals published for consultation state that all private rented sector (PRS) homes must meet a minimum standard based on a reformed Energy Performance Certificate (EPC) by the end of 2033, with new tenancies expected to comply from 2028. Propertymark welcomes the intention to improve energy efficiency across the housing stock, but we remain concerned about the potential burden on landlords and the capacity of the sector to meet these new obligations
Compliance and enforcement
Local authorities are best placed to enforce the new standards, but financial penalties must be fair. We recommend reducing the sharp jump in penalties between breaches of less than six months (£600) and more than six months (£3,000). A stepped approach of £1,200 for six months, with a further category for breaches over a year, we feel, would be more proportionate.
We also supported a higher penalty for deliberately false or misleading information, which should not carry the same fine as a minor breach. However, any move to increase maximum fines, up to £30,000, must only be a last resort and not treated as a revenue-raising measure for councils.
Any proposals for Minimum Energy Efficiency Standards for the private rented sector in Scotland must be realistic and achievable and take into consideration the impact on the supply of much-needed homes to rent in rural, island and urban communities.
Policy makers must recognise that landlords in Scotland are not immune to financial challenges from increased mortgage and building costs and will experience further financial challenges with the onset of rent control measures contained in the Housing (Scotland) Bill. Improved financing for energy efficiency improvements must be made available through grants and a more attractive and better publicised landlord loan scheme.
It is important that the changes are gradually introduced. A compliance deadline of 2033 risks putting pressure on the labour force and supply chain, leading to artificially high prices for energy efficiency improvement measures. We will continue to engage with the Scottish Government to ensure these proposals are appropriate for the private rented sector in Scotland.
