EPC reforms designed to underpin net zero journey

The EPC format will also be redesigned to make it easier to understand, and the validity of EPCs will be reduced from ten to five years to ensure consumers have more up-to-date information.

Subject to approval from the Scottish Parliament, the new regulations, EPC rating system and certificates are expected to be brought into force during the second half of 2026, subject to the availability of the UK Home Energy Model which will be required to calculate the ratings.

Responding to the consultation in November 2023, Propertymark welcomed the proposal to digitalise EPCs but cautioned that PDFs must remain as they are essential during the home buying and selling process for conveyancing solicitors.

Equally, we support the proposal to shorten the validity period of EPCs to five years as a lot can happen to a property within that time frame. We already encourage property agents to renew their EPCs as often as possible as a matter of good practice.

Domestic properties

The new EPCs will display three key metrics for a residential property; a Heat Retention Rating which shows how well insulated it is, a Heating System Type Rating that benchmarks the emissions, efficiency and running costs of the heating, and an Energy Cost Rating based on the cost of energy to run the house, based on standardised conditions.

Certificates will still include recommendations for efficiency upgrades, now called Potential Improvement Options, which will give homeowners information on elements of the building which could be considered for retrofit. This could include measures, such as loft insulation, replacement glazing, or changing heating systems.

Non-domestic properties

The Scottish Government acknowledges that the variety of building types and activities in non-domestic building stock means it will be challenging to identify decarbonisation solutions that can be used across all buildings. Therefore, EPCs for this sector will provide information about the direct emissions and energy use of the building and, importantly, introduce a rating that is comparable to the Asset Rating used across the rest of the UK.

The following key metrics will be used on non-domestic EPCs:

• Energy Efficiency Rating (A to G) kgCO2e/m2/year – based on modelled emissions from regulated energy use relative to a reference building to align with the rating system used across the UK
• Direct Emissions Rating (kgCO2e/m2/year) – the building’s modelled direct emissions from regulated energy use to allow a focus on the decarbonisation of individual buildings. For buildings which only use grid electricity, or are connected to a heat network, this will be zero
• Energy Demand Rating (kWh/m2/yr) - the building’s modelled regulated energy use under standardised conditions to allow comparisons between buildings

Increasing fees and penalties

A further technical consultation is gathering views on raising EPC  lodgement fees to £6 for domestic properties (currently £2.60) and £15.50 for non-domestic properties (currently £12.10 to meet the cost of developing and maintaining the new technical and operational infrastructure to underpin the revised regulations. 

The statutory lodgement fee is built into the overall fee charged to building owners by an EPC assessor for their services,  so property owners are not generally aware of it. However, they may see an increase in the cost of obtaining an EPC if providers choose to pass on the higher fee. 

Additionally, property owners who breach the requirements to ensure that a valid EPC is made available to prospective buyers or tenants when the property is sold or let will face higher penalty charges. The existing amounts- £500 for domestic and £1,000 for non-domestic - have been in place since they were originally set in 2008, and, therefore, the Scottish Government is seeking opinions on what amount would be fair and proportionate.