Energy Performance of Buildings (Scotland) Regulations 2025: business and regulatory impact assessment

Executive summary

Issue and why it needs to be addressed

Many external stakeholders and independent reports have highlighted concerns around the relevance, accuracy and quality of EPCs produced. The ratings which EPCs currently display have been criticised by stakeholders as in need of reform as, in their current format, EPCs are not aligned with our net zero ambitions. An independent review of EPCs recommended the need to improve the quality of EPCs and, in particular, to strengthen quality assurance requirements around audit and inspection of certificates^[7].

Furthermore, the supporting technical and operational infrastructure which underpins EPCs (the EPC Register and the EPC calculation methodology) is life-expired, requiring significant upgrades.

These calls for reform have been made across the UK, with the UK Government receiving similar recommendations from the Climate Change Committee and consumer groups such as Which?, following its decision to retain EPC legislation in UK law following EU exit.

Intended outcomes

We want to enhance EPCs so they continue to be a valuable source of information for home buyers, owners, and tenants, and to continue to support existing government policies and programmes.

The main changes introduced by the 2025 Regulations that will impact business are as follows:

• EPCs are better-aligned to net zero objectives, giving better information to current and prospective property owners and tenants;
• consumers receive more up-to-date information through EPCs which have a five-year instead of 10-year validity period, to more accurately reflect a property’s transition on the journey to net zero;
• life-expired systems are replaced through adopting updated calculation methodologies and infrastructure shared with the UK Government;
• EPCs are carried out to the highest standard through the introduction of enhanced quality assurance and oversight requirements for EPC assessors and Approved Organisations, including the creation of new onsite audit and inspection functions, thus maintaining alignment with the EU’s own enhanced audit requirements in the 2024 recast of the EPBD.

Options

Through discussions and engagement with stakeholders it was concluded that the continuation of an EPC regime was necessary (ruling out Option 1 which would repeal the regulations) but a business-as-usual approach (Option 0) was no longer appropriate. Option 2 proposed that the EPC regime be reformed and infrastructure shared with UK Government, whilst Option 3 proposed the EPC regime be reformed with separate infrastructure for Scotland. We consider Option 2 to be the most credible option for EPC reform.

Sectors Affected

We have engaged with a large number of relevant organisations and believe that the following sectors would be most affected by our proposed reforms. These include but are not limited to: Energy Assessors; Approved Organisations; Retrofit Assessors and Installers; Consumers; Landlords; Mortgage Lenders and Property Agents; and other industries who have interests in this area.

Engagement Completed, Ongoing & Planned

To date, three public consultations on EPC reform have been held across 2021, 2023 and 2025. We have also undertaken a number of stakeholder workshops, one-to-one meetings with businesses as well as engaging with, and receiving expert input from our External Reference Group (ERG) and subgroup of the Scottish Government’s Heat in Buildings Strategic Advisory Group (SAG).

Anticipated Impacts & Mitigating Actions

Reducing the validity of an EPC from 10 years to 5 years will mean consumers receive more up-to-date information which will more accurately reflect a property’s transition on the journey to net zero. It is expected that the reduced validity period would have the most significant impacts. The main impact will be on properties for let, where landlords will no longer be able to recycle valid EPCs for up to 10 years to cover new lets. Instead they will only be able to recycle for a maximum of five years. There will also be an impact for large public buildings which are always required to display a valid EPC, where we will put in place transitional arrangements to mitigate this (see Section 3).

There will be no change for owner occupiers given that to meet the requirements of the Home Report legislation a new EPC is in practice produced each time a domestic property is advertised for sale. For non-domestic properties advertised for sale, there is no equivalent requirement as in the Home Report legislation, so for these properties, the reduction in validity period could mean that a new EPC is required more frequently (i.e. for buildings sold more than five years after purchase). The increased lodgement fee will impact all EPCs lodged. However, this is a relatively small portion of the total cost of an EPC, so the cost in itself is not expected to have a behavioural impact on the number of EPCs lodged.

We believe that there are a wide range of non-monetised benefits which will be delivered for businesses and for other actors through our EPC reforms. These benefits are expected to be significant and include:

• clearer information for landlords and tenants; more accurate and accessible information for property owners;
• support to decarbonisation goals through improved energy efficiency information and information on clean heating options;
• support to other legislation, such as minimum energy efficiency standards, and potential for increased employment and economic activity.

Recommendations & Implementation Plans

The Scottish Government recommends proceeding with Option 2. It is proposed that the new regulations laid on 10 October 2025 will come into force in October 2026, to allow all directly impacted stakeholders sufficient time to prepare for these changes. In the months leading up to October 2026 we will ensure key stakeholders and the wider public are informed of how the changes to EPCs will affect them.

Evaluation, Monitoring of Implementation Review of BRIA

The Scottish Government will review both the level of EPC lodgement fees and penalty charges within two years of the regulations coming into force, to ensure they remain fair and proportionate. We will also review the operation of the onsite audit and inspection function, within two years of that function first being exercised. We will continue to monitor and review the implementation of the regulations, and the associated operational and technical infrastructure, within the market, on a regular basis.