Balance required to protect rural rental sector, reduce fuel poverty and meet energy efficiency goal

Press Release

Scottish Land & Estates (SLE) has urged the Scottish Government to ensure its proposed energy efficiency regulations deliver real benefits for rural communities. 

The rural business organisation says that with the right approach, the reforms could support both landlords and tenants, while protecting the viability of the rural rental sector.

A consultation on the draft energy efficiency standard for private rented property closes today, 29 August.

SLE continues to support the aims of the legislation but raises concerns over the cost and complexity of bringing older properties up to the required standard for energy efficiency (new EPC heat retention rating band C) by January 2028 for new tenancies. Scottish Government figures suggest that 48% of privately rented homes are below a band C.

The current framework focuses on heat loss through the fabric of the building (such as the walls and roof) but ignores those landlords who have already installed or wish to install low carbon, low cost or highly efficient heating systems to improve energy efficiency and reduce tenants’ heating bills.

In its consultation response, SLE proposes a weighted model that includes heating system efficiency and energy cost, as well as heat retention, to reduce energy use and better support the Scottish government’s aim to reduce fuel poverty. 

SLE highlights the example of a traditional Aberdeenshire cottage, let to tenants. Its owners have already invested £56,000 in energy efficiency improvements but the property is still not rated as band C and would not be compliant under the new rules. Further improvements to the fabric of the building are unlikely to make a significant difference.

Anna Gardiner, Scottish Land & Estates, said: “Rural properties are typically much older and therefore much harder to treat. Owners of traditional rural homes, who are vital providers of rental housing, face higher upgrade costs, limited access to contractors, and lower rental incomes, compared with urban rental properties.  We support the aim of the legislation – reducing carbon emissions from property, but there are specific challenges in rural and island areas. 

“In our meetings with government, we have stressed that focusing solely on heat retention means that a huge number of rural properties are unlikely to ever achieve compliance. Amending the regulations to take into account the efficiency, and consequently carbon emissions and running cost, of a heating system would result in a more effective and practical approach to energy efficiency, while reducing heating bills for tenants.

“The consultation presents an opportunity to address these points and ensure a more balanced outcome.” 

The proposed £10,000 cost cap remains unaffordable for many people who let out a property in a rural area, SLE reports. It takes no account of regional variations in market rents and could lead to rent increases or a further reduction in the supply of rental property, which is already under real pressure. 

Anna Gardiner continued: “We would urge the Scottish Government to undertake a full rural impact assessment before these regulations are finalised. This is essential to ensure the framework is fair, workable, and aligned with Scotland’s housing, fuel poverty, and net zero ambitions, without compromising the resilience of rural housing supply or penalising rural property owners who are already investing to improve energy efficiency. We welcome the opportunity to submit a consultation response and contribute to the goal of a more energy efficient, resilient, rural housing sector.”