Sometimes called district or communal heating, heat networks provide heating, cooling and hot water to multiple properties in a building or to multiple buildings from a single source.
Regulation will introduce new responsibilities and expectations across the property sector, and while full implementation will take time, agents and property managers should start familiarising themselves with how heat networks operate in their portfolios and what information consumers will expect.
Why heat networks are being regulated
Until now, heat networks have not been subject to the same level of independent regulation as gas and electricity. This has led to inconsistent pricing, limited consumer protections and a lack of clear routes for redress when things go wrong.
The UK Government has decided that Ofgem should become the statutory regulator for heat networks in England, Scotland, and Wales to address these issues. The aim is to give consumers fairer prices, clearer information and stronger protections, while providing certainty for operators and investors.
The timeline for regulation
Ofgem has set out a phased approach to regulation. Primary legislation has already been passed, giving Ofgem the powers it needs, and secondary legislation and detailed rules are being developed through a series of technical consultations.
Consumer advocacy and advice services were launched in April 2025, enabling individuals to get free support from Citizens Advice (England and Wales) and Advice Direct Scotland. Customers can also escalate complaints to the Energy Ombudsman if they are not satisfied with the response from the heat network operator.
Regulations will come into effect from 27 January 2026, introducing standards for fair pricing, consumer protections, and data reporting. Heat network operators required to register with Ofgem, meet authorisation conditions, and comply with ongoing regulatory requirements.
Propertymark’s engagement with Ofgem
We have communicated with Ofgem throughout the development of the new regulatory framework and responded to several technical consultations to ensure the practical realities faced by agents, property managers and consumers are fully understood.
These responses have covered consumer protection guidance, including how information should be presented to residents and what constitutes fair treatment. We have also fed back on proposals around fair pricing and cost allocation, highlighting the need for transparency and clarity where costs are shared across buildings.
In addition, Propertymark has responded to consultations on enforcement and penalty policies, stressing the importance of proportionate regulation, and on measures to mitigate the risks and impacts of heat network operator failure. We have also contributed to discussions on authorisation conditions, including registration requirements and how changes to operators should be notified.
Across all consultations, Propertymark has focused on ensuring regulation is workable, protects consumers and recognises the role agents play in managing and explaining complex arrangements.
Propertymark will continue to engage with Ofgem and keep members informed as the regulatory framework develops, providing guidance and support to help you navigate the changes with confidence.
Implications for property managers
Property managers, particularly those responsible for blocks with communal heating, will feel the impact most directly.
Managing agents may be acting on behalf of heat network operators or working closely with them. As regulation comes in, there will be new expectations around governance, transparency and communication with residents. Property managers will need to understand who the regulated entity is, what obligations apply, and how compliance is being met in practice.
There may also be increased scrutiny of service charges and heat costs, making accurate record-keeping and clear explanations to leaseholders and tenants more important than ever.
What sales and letting agents need to consider
For sales and letting agents, heat networks are likely to become material information that must be clearly disclosed to buyers and renters.
Agents should expect greater emphasis on explaining how a property is heated, who operates the heat network, how prices are set and what protections apply. As regulation beds in, consumers may also ask more detailed questions, particularly around costs, billing arrangements and complaints processes.
Advising clients accurately will rely on agents obtaining the right information from sellers, landlords, developers or managing agents at an early stage. Failing to do so could risk misunderstandings, complaints or delays further down the line.
What this means for consumers
Once regulation is in place, consumers connected to a heat network should benefit from protections that more closely mirror those in the wider energy market.
These include clearer and more consistent information about prices and bills, stricter rules to ensure charges are fair and proportionate, and improved standards for customer service. Consumers will also have clearer routes to complain and seek redress if standards are not met.
Importantly, Ofgem’s role will help address the imbalance where consumers often have no choice of heat supplier and cannot switch provider in the same way as gas or electricity customers.
