Private rented sector - minimum energy efficiency standard: consultation analysis

Executive summary

Background

The Scottish Government is proposing to progress regulations under existing powers in the Energy Act 2011 to introduce a minimum energy efficiency standard (MEES) in the private rented sector (PRS). The proposals in the consultation would mean all PRS properties, as far as possible, reaching reformed Energy Performance Certificate (EPC) Heat Retention Rating (HRR) band C from 2028 for new tenancies and 2033 for all privately rented homes. This supports fuel poverty aims and contributes to climate change targets.

The Scottish Government launched a consultation on PRS MEES on 6 June 2025, which closed on 29 August 2025. The consultation gave all who wished to comment an opportunity to do so. However, given the self-selecting nature of this type of exercise, any figures quoted here cannot be extrapolated to a wider population outwith the respondent sample.

Respondent profile

There were a total of 316 responses to this consultation; 107 from organisations and 209 from individuals. A majority of the organisation responses came from representative bodies, local authorities, landlords / letting agents / property agents, manufacturers / installers / suppliers and organisations in the third sector / advocacy / charity. A full breakdown of responses is provided in the respondent profile table on page 14; and a full breakdown for each question, by sub-group, in Appendix 2.

Key themes

A number of recurring themes emerged across consultation questions. When providing commentary in support of their answers, respondents often tended to focus on the potential negative impacts of each proposal, rather than the positive impacts. The following question summaries provide more detail.

Across the consultation as a whole, there was broad support from organisations for a number of the proposals. Individuals were less supportive. The most widely supported proposals were for the proposed exemptions; the availability of HEETSA to support an exemption; for all actual costs, and the cost of an EPC to count towards the cost cap; the provision of Scottish Government support for landlords; and local authorities to be responsible for monitoring and compliance.

A key issue for many respondents was that some properties will not be suitable for PRS MEES band C. These included older stone built properties, listed properties and tenements. It was felt that many energy efficiency upgrades that would be required under MEES would be unsuitable. Furthermore, there were some concerns over possible unintended negative consequences from upgrades, for example, a lack of ventilation leading to damp or mould. There were some requests for additional metrics to be considered, for example, heating system efficiency or the use of technology-neutral systems. It was felt these alternative metrics would offer more flexibility to landlords and allow them to make changes to their properties that were more suitable than those required under EPC HRR band C.

The cost of making necessary upgrades was felt by many to be prohibitive, particularly for landlords with properties in low rent areas, which are often rural, remote or island-based.

As such, a number of respondents felt that introduction of the PRS MEES could lead to a loss of properties in the sector and / or increases in rent to cover the cost of energy efficiency improvements. This would lead to a reduction in choice of rental properties for tenants and exacerbate the current housing crisis in Scotland. It was also felt this would impact most on tenants on lower incomes who might, in effect, have to pay more rent, which would undermine any savings they would make on energy efficiency upgrades and undermine the aims of the fuel poverty policy. There were some suggestions that it would be easier for landlords to change property use, such as move into the short-term holiday let sector, rather than carry out upgrades to their properties.

Another issue that would impact on tenants was that of having to find alternative accommodation while major energy efficiency improvements were undertaken, if they had to vacate their rented property.

There was support for most of the exemptions that were proposed, with the exception of the proposed cost cap of £10,000 and the 12 month lead in time period for works to contribute to the total cost cap. However, there were some requests for each property to be assessed on a case-by-case basis to determine its potential for energy efficiency improvements. Some respondents felt that climate change and fuel poverty policies could be undermined by offering exemptions, as they felt the worst energy performing properties would be those most likely to receive exemptions.

Linked to this, there was support for Heat & Energy Efficiency Technical Suitability Assessment (HEETSA) to be available as an option to evidence potential negative impacts on the fabric of a property and to support an exemption. Also, for any energy cost rating to be based on actual costs of the property rather than a modelled assumption.

There were some concerns that landlords who have already undertaken improvements will be penalised as these upgrades will not count towards PRS MEES.

Given the number of rental properties in the market that are likely to need energy efficiency upgrades, respondents voiced concerns over a lack of capacity and a lack of skilled professionals in the sector to undertake all necessary upgrades. There were also concerns about the cost of labour and materials. Concerns about backstop dates mostly focused on supply chain capacity and whether support would be available for landlords, as well as whether this would allow time to plan and undertake the work.

Linked to this, there was a high level of support for landlords to receive Scottish Government support and there were a number of calls for financial incentives to be provided to landlords. A majority of respondents wanted to see Scottish Government support to make the required changes, although only a minority supported this being in the form of a loan. The availability of grants, subsidies or loans were all mentioned, with a preference for grant support. This was because of the likely payback time of any loan, as well as their affordability. Other financial incentives suggested by respondents included tax deductions.

Regarding penalties for non-compliance, many individuals tended to regard these as too high, though some organisations thought they needed to be higher to exceed the costs of improvements. There were some calls for penalties to be more flexibly structured.

There were a number of calls for more information and clarity on many aspects of the proposals. For example, the Housing (Scotland) Bill has not yet completed the parliamentary process and will impact on any decisions regarding PRS MEES.

Allied to this latter point, there were also calls for guidance / advice / support to be provided to landlords and tenants.

There was widespread concern over whether local authorities have the capacity and resources to manage and enforce PRS MEES. Local authorities were perceived as being overburdened and underfunded to take on this additional workload.

Many of the issues raised by respondents were felt to be exacerbated for landlords and tenants living in more remote, rural and island areas, where many properties are older stone builds and often in low rent areas.

Summary of consultation questions

Whether PRS MEES should be EPC HRR band C (Q1)

35% of respondents agreed the PRS MEES should be EPC HRR band C; this comprised a majority of organisations (57%) but a minority of individuals (24%). The highest levels of dissent among organisations came from landlords / letting agents / property agents and manufacturers / suppliers / installers. Key points raised included:

• Those supporting this proposal felt this would align with net zero goals or the Social Housing Net Zero Standard specifically and noted the importance of ensuring PRS properties are energy efficient.
• A large minority had concerns that some types of property would not be able to meet the requirement for band C.
• This would be too costly for some landlords to undertake.
• A significant minority had concerns that this could bring about a reduction in rental stock and / or lead to rent increases as landlords try to recoup the cost of energy efficiency improvements.
• Suggestions for additional metrics were put forward including, for example, heating system efficiency or the use of technology-neutral systems.
• Requests for exemptions were made so that each property can be assessed on the basis of its potential for energy efficiency improvements.

Demonstrating compliance with existing or reformed EPCs (Q2)

Views were equally split between respondents who agreed and disagreed that only new reformed EPCs should be used as a basis for the proposed MEES (41% each agreed and disagreed). There were much higher levels of support from organisations than individuals (70% compared to 26%). Key points were:

• This will be necessary to drive fabric upgrades to reduce energy demand and contribute to reduced levels of fuel poverty. It also provides consistency, accuracy and relevance in assessing building performance.
• The amount of additional work, expense and bureaucracy this would incur for landlords, with some comments that the costs could be prohibitive.
• Concerns that landlords who have already undertaken improvements will be penalised as these upgrades will not count towards PRS MEES.
• Some suggestions that existing EPCs should be acceptable until their expiry date or that these could be considered compliant with the new regulations.

Backstop date: 2033 (Q3)

Almost a third (29%) of respondents supported a backstop date of 2033 for all PRS homes to comply with MEES, compared to 56% who disagreed. Support was higher from organisations (40%) than individuals (24%). Key points were:

• Those in favour of this date felt it allows enough time to comply and for any improvements to be planned and implemented.
• Mainly caveats and provisos expressed in relation to the back stop date. This included concerns about supply chain capacity to cope, concerns over the amount and availability of support as well as more time needed to plan and undertake any required work.
• Among those disagreeing with the date, there were some calls for the backstop date to be brought forward, given timings have already slipped and this would align better with other initiatives such as the Clean Power 2030 target, as well as aligning with the proposed new tenancies deadline.
• A number of problems were raised more broadly with the proposals.

In force date and earlier phased action: 2028 (Q4)

Almost a third (29%) of respondents agreed that the MEES should apply to properties being let to new tenants from 2028, compared to 59% who disagreed. Support was again higher from organisations (53%) than individuals (17%). Key points raised included:

• A phased rollout due to different backstop dates would help ease supply chain capacity bottlenecks.
• Main caveats were supply chain capacity concerns, availability of support, speed of implementation of regulations and speed at which monitoring and enforcement mechanisms can be put in place.
• Main reason for disagreeing is that there will be insufficient time to plan and undertake works.
• More generally, there is too much uncertainty about what is required.

Tenancies in scope: crofters, small landholders and agricultural holdings (Q5)

There was agreement from almost half (46%) of respondents; and disagreement from nearly a quarter (22%) that regardless of change to the repairing standard, crofters, smallholders and agricultural holdings should be excluded from PRS MEES. Higher numbers of individuals (52%) agreed with this proposal, than organisations (34%). Key points included:

• Agreement for these categories to be excluded because they offer a different type of tenancy from the mainstream in terms of their length, nature and legal framework.
• Many rural properties are difficult to improve from a practical point of view.
• However, if included, these tenancies would benefit more than most from improved energy efficiency standards, given they have some of the worst fuel poverty.
• There was also a viewpoint that all housing including these tenancies should reach the same standard to maximise the benefits from the proposals.

Tenancies in scope: Short-term holiday lets (STHL) (Q6)

Just over half (52%) disagreed short-term lets should be excluded from PRS MEES, compared to 35% who agreed. Higher numbers of individuals (41%) agreed that STHL should be excluded, than organisations (24%). Key themes were:

• In supporting exclusion, the benefits were perceived to be less than for other sectors as they are not permanent residences.
• Fuel poverty was not seen as applying to STHL because it is the landlord who pays the energy bills.
• Those who disagreed foresaw a risk of landlords converting tenancy type to STHL from PRS to avoid having to comply.
• There was also a belief that all tenancy sectors including STHL should contribute to climate goals, and that all tenancies would benefit from improved energy efficiency or reduced energy demands.

Exemptions (Q7)

Exemptions covering consent, the fabric requirements of the home and temporary exemptions were supported by a majority of respondents (58%), with 23% disagreeing. Slightly higher numbers of organisations (64%) agreed than individuals (54%). Key points were:

• Those who disagreed felt there should be no exemptions at all or only available on very rare occasions; exemptions could lead to further inequalities for tenants.
• These exemptions offer a loophole that landlords might exploit.
• Concerns over the proposed 6 month timeframe for a temporary exemption to address specific circumstances such as situations where a landlord inherits or purchases a property with a sitting tenant. This was not perceived as long enough by some respondents.
• Concerns over a lack of skilled professionals to undertake assessments, as well as a lack of capacity (labour and resources) to undertake energy efficiency improvements.
• Suggestions to approach each property on a case-by-case basis and offering flexibility to accommodate specific circumstances.
• A need for review and oversight to be in place.
• Requests for guidance, advice and support, as well as financial support and incentives.

Whether HEETSA should be available as an option to evidence potential negative impacts on the fabric of a property and to support an exemption (Q8)

68% of respondents agreed with this proposal; only 10% did not agree. Organisations were slightly more positive (76%) than individuals (64%). Key points raised included:

• Those in favour felt this would help landlords make informed decisions; specific to each property, based on expert advice and not based on modelled assumptions.
• This also allows for avoidance of inappropriate improvement work.
• However, there were concerns over the cost of undertaking any work; this could fall disproportionately on landlords with single or fewer than 5 properties and / or those in remote, rural or island communities.
• Also concerns over a lack of suitable skilled professionals to undertake assessments.

Cost cap (Q9)

There was limited support for this; 24% supported this and 59% did not. Levels of support were similar for organisations (22%) and individuals (25%). Key themes outlined by respondents were:

• The cap (£10,000) is too high and many landlords cannot afford the cost of energy efficiency improvements.
• Alternative cost caps were suggested, the most frequently mentioned was £5,000. A small minority of respondents felt the cost cap should be higher.
• Requests for financial assistance, guidance, and a scheme for monitoring and review.
• Concerns that landlords could gain exemptions from some appropriate and suitable measures due to their cost.
• This could take properties away from the PRS sector and / or lead to rent increases.

The proposed 12 month lead in time period for works to contribute to the total cost cap (Q10)

Overall, 42% agreed with this, compared to 39% who did not. Organisations were more supportive (54%) compared to individuals (36%). Key points raised included:

• This approach recognises early adoption and investment and avoids penalising proactive landlords, as well as supporting implementation of MEES and allowing landlords to plan ahead.
• However, there were concerns over a lack of skilled professionals and capacity constraints because of possible levels of high demand from a limited number of contractors. This was felt to be a particular issue in rural, remote and island communities.
• Some suggestions for a longer time period for works to contribute to the total cost cap.
• Exemptions should be offered to any major upgrade works already undertaken or carried out in the last 3 years.

Costs counting towards the cost cap (Q11)

A large majority (81%) agreed all actual costs, and the cost of an EPC, should count towards the cost cap; only 11% disagreed. The views of organisations and individuals were similar with 77% of organisations and 83% of individuals supporting this proposal. Key themes emerging were:

• This is fair, reasonable and encourages transparency and fairness, while helping landlords to plan and invest in energy efficiency improvements.
• Including the cost of an EPC would encourage landlords to obtain up-to-date assessments for their property.
• Respondents cited a wide range of costs that should be included in a cost cap.
• Those who disagreed felt that the cost of an EPC is the responsibility of a landlord.
• A cap of £10,000 is too low as it will be difficult to achieve energy efficiency upgrades on this budget.

Support (Q12)

There was widespread agreement that landlords should receive Scottish Government support to make the required changes; 83% agreed, compared to only 9% who disagreed. There was little difference between organisations (80% agreement) and individuals (85% agreement). Key points raised included:

• The main focus was the expense of complying with regulations in the absence of government support.
• There is a risk of landlords leaving the PRS market by selling up or changing property use if support is not offered.
• There was a preference for grant support, though loans were also supported.
• Non-financial support was also requested.
• Support should be predicated on the type of LTS landlord.

Loans (Q13)

31% agreed with Scottish Government support taking the form of a loan, while 49% disagreed. Organisations were more positive (47%) than individuals (22%). Key points raised were:

• Loans were seen as an aid to accelerate improvements.
• Loans should be tailored depending on the type or size of landlord; there were some suggestions for these to be interest free.
• However, there was greater support for grants among individuals and landlords / letting agents / property agents.
• Also widespread support for a mix of grants and loans.
• Many suggestions for other types of financial or fiscal support.

Monitoring and enforcement (Q14)

56% of respondents supported local authorities being given responsibility for monitoring and compliance of these regulations; compared to 27% who did not support this proposal. Organisations were more supportive (68%) than individuals (49%). Key themes included:

• Widespread agreement that local authorities should be responsible for monitoring and compliance, aligning with their existing responsibilities in the housing sector, but with multiple caveats.
• There were widespread concerns over local authorities’ resources and capacity to manage this, with local authorities perceived as overburdened and underfunded.
• Some requests for local authorities to be funded and to have sufficient numbers of adequately trained staff.
• But very few alternatives to local authority responsibility were identified.

Penalties (Q15)

Only 23% of respondents agreed with the proposed level of financial penalties to support compliance with the regulations; 54% disagreed. Higher numbers of organisations supported this than individuals (34% compared to 18%). Key points were:

• Individuals tended to suggest the proposed level of penalties was too high.
• Some resistance to any financial penalties at all, with a preference for a “carrot and stick” approach.
• Mainly organisations tended to view the penalty levels as too low; concerns that landlords may simply accept penalties unless they exceed the cost of improvements.
• Requests for a more tiered or flexible penalty structure, with a variety of suggestions on how to base this.
• Also requests for more flexibility in timescales.
• Concerns expressed about difficulties in enforcing penalties.

Amendment to primary legislation: Energy Act 2011 (Q16)

26% of respondents supported the proposal that the Scottish Government should amend the Energy Act 2011 to increase maximum financial penalties that could be imposed in the future; 59% did not support this. Support was far greater among organisations (50%) than individuals (13%). Key issues were:

• Those agreeing saw a place for high penalties, particularly in that it no longer would make financial sense for landlords to opt for penalties rather than undertake works.
• But most individuals saw £30,000 as far too high a penalty.
• Not felt to improve MEES attainment.
• Argued that if landlords cannot afford upgrades, they cannot afford that level of fine.
• Concerns that landlords will react by selling properties or changing their usage.

Impact assessments (Q17)

A significant minority of respondents felt these could have a positive impact, although there were some concerns this could also result in unintended consequences for tenants, landlords and local authorities. For example, it could bring about improvements in health and wellbeing outcomes, providing appropriate upgrades are carried out; if appropriate upgrades are not carried out, there could be damage to health due to inadequate ventilation.

Key negative impacts for tenants were a reduced number of properties available in the PRS, rent increases (which would undermine any energy savings) and the need to find alternative accommodation while work is being undertaken.

Within rural, remote and island communities, it was felt the negative impacts could be more exaggerated.