Energy Performance of Buildings (Scotland) Regulations 2025: technical consultation analysis

Lodgement Fees

The consultation paper set out three new regulatory functions, each to be exercised by the Scottish Government. These included:

• A new EPC Register
• An EPC Calculation Methodology
• A new on-site Audit and Inspection function

The Scottish Government expects to begin delivering these three new regulatory functions during financial years 2026-27 and 2027-28, to coincide with the new regulations coming into force. While the set-up cost would be borne initially by the Scottish Government, proposals were put forward for the ongoing running costs to be covered by lodgement fee income.

The consultation proposed increasing the current lodgement fees by £3.40 for both domestic and non-domestic properties, meaning the new fees would be as follows:

• £6.00 for domestic EPCs
• £15.50 for non-domestic EPCs

In order to ensure stable fee levels to provide certainty for AOs in projecting future costs, the consultation also proposed that a review of the fee level would be conducted within two years of the regulations coming into force to ensure they remain appropriate.

Funding the EPC Regulatory Regime via a Lodgement Fee

Q1. To what extent do you support the Scottish Government’s proposal that elements of the EPC regulatory regime which provide direct benefits to service users, should be funded through a statutory fee levied on lodgement of each EPC?

Of the 28 respondents who answered the question, 19 (68%) supported to some extent the use of a statutory fee levied on lodgement of each EPC in order to fund the new elements of the EPC regulatory regime. This included individuals and a wide range of organisations from different sectors. Conversely, seven respondents (25%) opposed this proposal, all of whom were individuals.

Reasons for Support

Those who supported the use of a statutory fee typically suggested it was sensible, reasonable, and consistent with the current system. A few felt that this provided standardisation. Meanwhile, several respondents agreed that the process should be paid for by the customer/service user, with a few (including organisations and an individual) noting that the proposed fee meant that it would only have a small impact on overall EPC costs and so should not adversely impact consumers:

“[Organisation] strongly supports the Scottish Government’s proposal that elements of the EPC regulatory regime which provide benefits to service users should be funded through a statutory fee levied on lodgement of each EPC. This funding model has been followed for several years now and it has enabled the system to be continuously developed and maintained with very little disruption or financial strain on service users.” (Energy Focused Organisation)

Caveats to Support

Support was offered by one individual on the condition that the fee remained reasonable. While they agreed that the current fee proposals were reasonable, it was stressed that any future increases needed to remain so.

One organisation noted that, while they generally supported the proposal, a statutory fee, combined with the reduced validity period of individual EPCs (from 10 years to five years) would result in increased costs for social housing provision. They also supported the proposal for a statutory fee in relation to non-domestic properties on the condition that the calculation methodology was improved and provides more accurate assessments that can be used for future investments. It was suggested that certain measures can currently have a greater impact than the software predicts, which can be misleading.

Another organisation also somewhat supported the proposal, but was concerned about inaccuracies in EPCs, particularly when they have been conducted by organisations with perceived vested interests. They advocated for the on-site audit and inspection function (discussed more in the following chapter) to be carried out proportionally across Scottish local authority areas.

One organisation stressed that there needed to be transparency in how the fee was set and reviewed, along with clear guidance on how the additional revenue would enhance the quality of EPCs and boost consumer confidence. Similarly, a few respondents stressed that the Scottish Government need to ensure the benefits to the customer and society are clear and known, particularly in relation to the audit function. One specifically highlighted that the consultation paper and question did not set out the measures of the range of benefits.

Two organisations urged the Scottish Government to also give consideration to charging for access to the EPC register data, as this holds significant value and is widely used within the property sector. This was considered to more fairly share or distribute the costs between the generation of EPCs and other users of the data. One of these organisations also suggested that additional or alternative funding could come from enforcement measures. For example, the use of fines against companies found to have issued inaccurate EPCs following an inspection.

One individual, while content with a statutory fee, argued that assessors should be able to lodge EPCs directly with the new register rather than using “middle men companies”. They were concerned that these companies would add a markup or multiplier to the fee:

“Happy for there to be a statutory fee, however, the middle men companies which assessors have to lodge through should be eliminated. They will just put a multiplier onto the statutory fee, as they currently do with lodgement fees (by ~250% I might add), which will have to be passed onto customers as there is already a race to the bottom in the industry. They do not provide any benefit to assessors or public bodies and can be done fully in house by the Scottish Government. Assessors should be able to directly lodge with the new Scottish EPC Register.” (Individual)

Reasons for Opposing

As noted above, all opposing views came from individuals. Three perceived the use of a statutory fee on the lodgement of EPCs as a tax, with one of these respondents noting that increased taxes meant less of their income would be available for essential living costs.

One individual felt that such a fee represented an unnecessary cost. Meanwhile, another argued that the EPC function itself was not fit for purpose, had no direct benefit to anyone, and therefore was not required.

Another individual argued that the EPC register was used by many different parties, and so funding this via the lodgement fee alone appeared unfair. This comment was consistent with the suggestion above from different respondents that charging for access to this could provide additional income.

Raising the Lodgement Fee by £3.40

Q2. To what extent do you support or oppose the Scottish Government’s proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs?

Note: this table does not add up to 100% due to rounding.

Of the 28 respondents who answered this question, 14 (50%) supported to some extent the proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs. This consisted of a wide range of organisations from different sectors and three individuals. Conversely, 12 respondents (42%) opposed this proposal, including most individuals (n=9) and three organisations.

Reasons for Support

Respondents gave a range of reasons for supporting this proposal. Some supported raising the fee in order to cover the costs of the additional regulatory services which will require additional resources, and to ensure the system is well supported and quality assured. Some suggested that the increase would be broadly in line with inflation, which they considered reasonable. A few also welcomed the fact that the proposed costs would remain lower than some other European countries/the European average.

A few other reasons were outlined, by one respondent each, including:

• The increase would be minor (particularly in the context of the entire EPC process), and affordable for most
• The increase was reasonable and appropriate to the costs of the new regulatory requirements
• The scale of the increase was fair and proportionate

Caveats to Support

One organisation noted that this increase would have significant financial impacts when applied to the full council housing stock, with increases potentially being passed on to tenants, both for the domestic and non-domestic estates. The reduced lifespan of the EPC from 10 years to five years was also highlighted as an issue that would increase costs, as the EPCs would need to be renewed more often. However, they were more positive regarding the non-domestic costs, suggesting the increase would be reasonable if the EPCs provide accurate and usable information.

Another organisation, while broadly supportive of the proposed increase, highlighted that it could have a disproportionate impact on some, particularly landlords and property agents operating in remote, rural and island locations. They stated this was because many properties require more frequent reassessment due to their type of heating systems (e.g. biomass, oil, electric heating) which may necessitate additional EPC lodgements (although it should be noted that there is, in fact, no requirement for more frequent reassessment due to heating system type, in the EPC regulations), and because rental yields are typically lower meaning increased fees represent a higher proportion of landlords’ operational costs. This respondent was also concerned about any future increases. They stressed that, should further increases be considered, the broader economic challenges faced by landlords and property agents would need to be reflected in the decision.

One individual suggested that a higher increase should be considered for non-domestic EPCs because the surveys are more expensive than those for domestic properties. They felt that the increase should be implemented as a percentage of the total cost, rather than a flat rate. This respondent also echoed their earlier comment against the use of “middle men companies”. They again argued that AOs should not be required and that there needed to be a direct mechanism for lodging an EPC with the register instead.

Reasons for Opposing

Only three organisations opposed the increase in lodgement fees. Across all three, the main concern was related to the scale of the increase. One highlighted the disproportionality between domestic and non-domestic properties. They felt that the increase as a proportion of the fee was significantly higher for domestic properties than non-domestic properties. Another felt that a flat rate increase across both domestic and non-domestic EPCs may have a disproportionate impact on smaller sized and valued properties. Instead, they argued that the fee should be linked to a property’s total floor area to ensure a fairer distribution of the costs. The third organisation felt the increase represented “a significant jump” (Approved Organisation), especially when taking into consideration the reduced validity period of the EPCs (and the need to renew more often). This respondent, along with one individual, was concerned that the EPC fees in Scotland could be higher than is charged in England, with the individual advocating for equality of pricing across the UK:

“…the increase will represent a big difference to current UK lodgement fees, and depending on the strand the EPC is lodged on could actually be more expensive than the lodgement fee applied by schemes^[2].” (Approved Organisation)

One organisation and one individual also echoed concerns raised above in relation to the increased frequency with which EPCs would need to be renewed. They suggested that the requirement to re-assess properties every five years would significantly increase (and potentially double) costs for local authorities and housing associations:

“The impact of the increase in lodgement fees and the decrease of validity period to 5 years will mean that RSLs [Registered Social Landlords] may need to spend almost 2x what they [are] spending at the moment.” (Approved Organisation)

One individual also suggested that increased costs would be passed on to customers rather than absorbed by AOs as they highlighted that the market price for EPCs was already very low and contained little room for assessors to absorb the increase to the fee. Further, they indicated that the increased cost to customers would be exacerbated by the implementation of the RdSAP 10, as the assessments would take longer to do.

Another individual was concerned that there would be duplication in the audit process, with both AOs/accredited bodies and the Scottish Government undertaking these.

Consistent with feedback at Q1, a few individuals again opposed the increase in lodgement fees on the basis that it represented another tax. One individual was concerned about the scale of any future increases in the fee amount. Another individual complained about the quality of current EPCs, suggesting that they were inconsistent and did not reflect the true nature of the building.

Review the Lodgement Fee Within Two Years

Q3. To what extent do you support or oppose the Scottish Government’s intention to review the lodgement fee level within two years of the new regulations coming into force, to ensure they remain appropriate?

Note: this table does not add up to 100% due to rounding.

Of the 28 respondents who answered the question, 17 (61%) supported the proposal to review the lodgement fee level within two years of the new regulations coming into force. Conversely, eight (29%) opposed this approach, consisting mainly of individuals (n=6).

Reasons for Support

Those who supported this proposal felt it was sensible to include a timely review in order to consider whether the fee amount was appropriate and allowed the regulatory functions to operate effectively. In particular, respondents felt it was important to understand and cover the actual cost of undertaking the regulatory functions, and provide the opportunity to take account of inflation as well as other factors relevant to the economic and policy landscape:

“Time-limited review processes would add valuable flexibility, enabling the Scottish Government to compare income generation expectations against results, to analyse the actual costs of undertaking the various regulatory functions in practice, and to consider inflationary pressures and the wider built environment context, prior to making any decisions to maintain or change the fee structure.” (Built Environment Focused Organisation)

The two year time period was also considered to be appropriate as it would allow sufficient time for the system to become established before conducting a review.

A few respondents advocated for regular reviews to be conducted, i.e. for this not to simply be a one-time only consideration. It was argued that regular reviews can avoid the need for large fee increases, and that reviews need not always result in a fee increase if it is not necessary:

“The lodgement fee should also be reviewed at least every two years thereafter. This would ensure that any required increases to fees, to account for increased costs, are made incrementally as required avoiding the need for large fee increases at any one point in time.” (Energy Focused Organisation)

A few also suggested that the review should consider the system more widely, looking at penalties for non-compliance, addressing bad practice, and identifying and rewarding good practice.

Caveats to Support

While somewhat supporting the review proposal, one organisation argued that there should be no further fee increases unless the situation radically changed.

Similarly, one individual was concerned that introducing regular reviews of the fee could lead to repeated increases which may not be reasonable. They stressed that all increases would need to be justified and necessary to cover the costs. For example, they were against any model which adopted annual fee increases determined by inflation plus a fixed amount or percentage.

One organisation questioned whether there would be any consultation on revisions to the lodgement fee following the initial two year review. They also suggested that it may be more sensible to review non-domestic lodgement fees after five years, as this would cover the lifetime of the new EPC certificate.

Another organisation questioned whether lodgement fees should be increased across the board, or whether revenue from penalty charges could be used to subsidise increases in the fees paid to AOs (which were considered to be too low currently). They stressed that any changes should incentivise good practice and compliance and address bad practice and non-compliance, rather than raising costs for all regardless of compliance levels.

Reasons for Opposing

The reasons given against this proposal were generally split between those who opposed the lodgement fee in principle or opposed any increases to this, and those who felt that the timescale or approach to the review could be adjusted to be more efficient.

The two organisations who somewhat opposed the proposal did not disagree with its aims, but rather they offered alternative options which they considered more effective. One argued that the review should be undertaken annually to highlight the value for money that was being achieved for stakeholders. The other suggested that, rather than a review, annual adjustments should be applied in line with CPIH^[3] inflation. They argued that this would allow price increases to keep pace with rising costs without the need for resource intensive reviews, although a review of fees/funding could be undertaken when significant changes in the services provided or structure of the EPC regime occur.

Again, the individuals who opposed this proposal were largely against the use of the fee to fund the regulatory functions. Consistent with previous responses, this was referred to as a tax, and was seen as escalating costs and burdens on property owners. One noted that the fee model included no real link to inflation, while another objected to increasing fees without any tangible benefits. Two individuals who strongly opposed the proposal provided more general feedback, with one objecting to penalty charges (discussed elsewhere in the consultation) and the other indicating distrust of the Scottish Government.

Feedback on Lodgement Fees from the Workshops

Views expressed in the workshops were largely consistent across the three events. It was also similar to feedback in the written responses (outlined above).

While there was some general agreement that the proposals in relation to lodgement fees and the increases in fees were fair, a range of issues or concerns were also raised, including:

• A strong desire to consider the introduction of fees for accessing and using the data from the EPC register. It was suggested that there could be differences in the nature of the data available via an open register and a closed register, or utilising a subscription mechanism, with fees applied for accessing additional or more detailed data. Introducing such a fee was considered fairer, particularly where organisations can monetise the data
• Concerns that the introduction of a statutory fee, increases to the lodgement fee, and the reduction in the validity period of EPCs (from 10 years to five years) would add significant costs in the domestic market, and for social landlords in particular, which may be beyond what they can realistically pay
• Concerns that the current proposals, combined with the introduction of the RdSAP 10 and the move to the Home Energy Model (HEM) would result in more significant increases in overall EPC costs than suggested by the consultation paper
• The perceived need to include a mechanism to take account of inflation over time
• Consideration of how to better ensure enforcement of the EPC requirements and penalising non-compliance
• More flexibility to be built into the non-domestic assessments related to the scale of work required
• The increases to the fee amount not addressing the time penalty related to carrying out assessments in remote, rural and island areas. Additional travel time is incurred in such situations, making the average cost of assessments higher. It was felt that more needed to be done to ensure local provision or to consider adjustments which may alleviate this