Energy Performance of Buildings (Scotland) Regulations 2025: Fairer Scotland Duty assessment

Summary of assessment findings

The following principal socio-economic impacts have been identified, together with their mitigations, below:

• Affordability of EPCs for consumers
• Relevance of EPC ratings to consumers and to support government policies
• Accuracy of EPCs to improve their quality for consumers

Affordability of EPCs

The Scottish Government recognises that our EPC reforms will require increases to EPC lodgement fees and that these costs are likely to be passed onto consumers as part of the overall cost of the certificate (which is around £100 at present for domestic certificates).

The revised lodgement fee set in the new regulations will increase domestic EPC lodgement fees from £2.60 to £6.00, and non-domestic fees to £15.50. As highlighted above, the requirement to obtain an EPC is on the building owner when selling or letting a property. While all consumers will be directly impacted by the increase in EPC lodgement fees, the increase represents a small increase when taking wider context of EPC reforms into account. Overall the cost of the EPC around £100 for a domestic property, remains a tiny proportion of the sale price of a property, or the annual rent charged.

Comparative analysis with the UK Government and the rest of the EU shows that EPC prices vary substantially, with larger countries such as the UK able to reduce costs due to greater volume of transactions relative to the similar fixed costs of maintaining the technical infrastructure. On the other hand, smaller countries such as Lithuania, Ireland and Denmark charge administrative fees of around £5 to £25 per domestic EPC. Research published by ClimateXChange^[13] summarised the fees charged by other small and medium countries and showed the fee level of £6.00 for an EPC in Scotland is well within the price range of comparative small EU countries.

Overall EPC costs in the EU are substantially higher than in Scotland, and range from €95-600 per domestic EPC^[14]. When taking into account the average cost of a domestic EPC, the increase represents a small proportion of the overall cost.

The socio-economic impacts of the higher lodgement fees, as a proportion of the overall £100 average cost of a domestic EPC, are therefore likely to be negligible, and we assess that further mitigations are not required.

Evidence from existing statistical publications indicates that there are socioeconomic differences linked with housing tenure. For example:

• The Scottish Household Survey indicates that, in 2023^[15], households in rented dwellings were more likely to be in the lower SIMD quintiles. 19% of households in private rented dwellings and 47% of those in social rented dwellings were in Quintile 1, the 20% most deprived, compared to 11% of owner occupiers
• ^{Data from the Family Resources Survey[16] indicates that in the period 2021-24, 42% of people in social rented housing and 32% of people in private rented housing were in relative poverty, compared to 20% of the population as a whole}

Rented households are likely to face more direct impacts from EPC Reform, particularly in the private rented sector, as there is a requirement for a valid EPC to be available for all new tenancies. By reducing the EPC validity period to five-years, EPCs will therefore have to be produced more often. However, it should be noted that the impact of the lodgement fee increase and reduced validity period is paid by the landlord, rather than the tenant. While it is possible that this cost could wholly or partially be passed through to the tenant through rent, the impact per property is very small, and therefore PRS tenants are unlikely to be significantly affected.

Relevance of EPC ratings

The Scottish Government recognises that the ratings and information provided on EPCs are an important tool for consumers to understand the impact that poor energy performance of a building could have upon their energy bills – and steps that they could take to improve this. The ratings are therefore important for guiding government delivery programmes to help them target buildings with poor energy performance, which will often coincide with areas of socio-economic disadvantage. Our reforms therefore recognise the need to retain aspects of the current system which work well for consumers and government delivery programmes, and to enhance and add to these to ensure better information is provided.

To ensure all consumers are provided with relevant and accurate information about the energy efficiency of a building, and the potential options to improve this, the following ratings will appear on domestic EPCs:

• The Heat Retention Rating, this will provide new information on the fabric energy efficiency of the home – i.e. how well insulated it is.
• The Heating System Type Rating, which will show the current and potential emissions category, thermal efficiency, and running costs, of a home’s heating system
• The Energy Efficiency Rating will be retained and renamed to the Energy Cost Rating. This is based on the cost of energy to run the dwelling to standardised conditions.

Reformed EPCs will therefore provide clearer information on all current and potential clean heating options for a building – the thermal efficiency, emissions, running costs and installation costs. This will enable all consumers to make a fair comparison when taking decisions on future heating for their building. By renaming, and retaining, the Energy Efficiency Rating (as the Energy Cost Rating), consumers and government programmes will continue to understand the cost impacts of the building’s current energy performance – and where improvements could be made that will reduce costs. This will continue to support policies mitigating socio-economic disadvantage.

In addition, the new Heat Retention Rating will provide new information on the fabric energy efficiency of a property. This will help consumers and government programmes to more clearly understand in which properties, poor energy efficiency may be acting as a driver of fuel poverty. Government programmes can therefore, together with the Energy Cost Rating, be better targeted at those properties where fuel poor households will benefit from improvements to the building’s insulation, in order to reduce demand for heat.

The new EPCs will also highlight any advice and funding support that is available to help encourage people to improve the energy efficiency of their home and ultimately make their buildings cheaper to heat.

Overall, by providing more relevant EPC information to all consumers, those who are socio-economically disadvantaged will be better able to understand the energy performance of their current or potential home and how this could be improved and how energy costs could be reduced.

Accuracy of EPCs

The Scottish Government recognises that consumers need to have confidence that EPCs are accurate and reliable. Accurate EPCs will help to protect those who are socio-economically disadvantaged by ensuring that they know which potential improvement measures are most appropriate for their building. The Scottish Government is therefore introducing new requirements for EPC assessors and the Approved Organisations which oversee them to drive up standards of EPC quality and ensure higher levels of consumer confidence and increased consumer protection.

By creating the new onsite audit regime, assessors and Approved Organisations will receive an additional set of checks and scrutiny to ensure that EPCs are accurate and reliable. The Scottish Government believes that this will help to drive up standards and will support assessors in their continuing professional development to raise their skills and knowledge. The anticipated impact of this will be an improvement in the reputation of EPC assessors and the assessment sector more generally, leading to greater consumer confidence and consumer protection, benefitting all users of EPCs, including those households who are socio-economically disadvantaged.

Public engagement and communications

Beyond the specific mitigations outlined above, a communications plan will be developed to ensure our key stakeholders and the wider public are made aware of the EPC reforms and how these changes may affect them in advance of the regulations coming into force. This communications plans will be designed to ensure those who are socio-economically disadvantaged are targeted.