New Energy Efficiency Regulations Coming 2026

The Scottish Government is introducing new energy efficiency regulations that will reshape the way private rented properties are assessed and upgraded. The Scottish Government’s new Heat Retention Rating (HRR) system is set to begin rolling out across Scotland from autumn 2026, marking the first stage of a gradual transition toward full compliance by 2033. For landlords, it signals a clear shift toward higher building standards and more sustainable housing.

Introducing the Heat Retention Rating (HRR)

The current Energy Performance Certificate (EPC) system, which most landlords will be familiar with, is being reformed. A new measurement, called the Heat Retention Rating (HRR), will be introduced as part of an updated EPC framework.

Unlike the existing EPC score, which focuses on estimated running costs, HRR will measure how effectively a property retains heat. This provides a more accurate picture of insulation quality, air tightness, and energy efficiency in practical terms. In other words, it looks less at what you spend and more at how well your property holds warmth.

Key Dates to Know

• Autumn 2026: New EPCs that include the HRR system will begin to roll out across Scotland.

• 1 April 2028: From this date, landlords will only be able to grant new tenancies if the property meets at least HRR Band C.

• 31 December 2033 (or 1 April 2033): This marks the final deadline for all tenancies, including existing lets, to comply with a minimum HRR Band C rating.

Any property rated below Band C will be classed as “substandard” and will not meet the minimum energy efficiency threshold required for letting under the new system.

Why This Change Matters

Scotland’s rental market includes a large number of older buildings, many of which struggle with heat loss due to outdated insulation, draughts, or inefficient heating systems. The HRR reforms are designed to encourage long-term investment in the energy performance of these homes, improving living conditions for tenants while reducing carbon emissions across the housing sector.

For landlords, this presents both a challenge and an opportunity. Meeting the new standards may involve an initial outlay on upgrades, but the benefits include reduced maintenance costs, improved tenant satisfaction, and stronger long-term property value.

Expected Costs and Support

The Scottish Government recognises that upgrading properties comes with financial implications. Initial estimates suggest:

• Average improvement costs are expected to range between £1,400 and £2,700 per property, with funding options available to help spread costs.

• A cost cap of around £10,000 per property, limiting the maximum spend required

Landlords will not be expected to exceed this cap to reach compliance. Support schemes, such as loans and grants through Home Energy Scotland, may help offset costs for eligible improvements.

Upgrades That May Be Required

Reaching HRR Band C will typically require physical improvements to the building’s structure and heating systems. Common upgrades include:

• Enhanced wall, floor, and roof insulation

• Replacing or upgrading windows with modern double glazing

• Installing efficient heating systems or renewable technologies

• Draught proofing to minimise heat loss

These changes can reduce tenants’ energy bills, create a more comfortable environment, and ensure properties remain competitive in a tighter regulatory landscape.

Steps Landlords Should Take Now

Although the first key date is still ahead, early preparation is essential. Landlords are encouraged to:

• Review their property’s current EPC rating and understand its weaknesses

• Commission a professional inspection to identify improvement areas

• Budget for upgrades in advance of 2028

• Keep clear records of all improvement works, certificates, and correspondence

• Monitor updates from official government sources for finalised requirements

Planning ahead can prevent last-minute costs or disruption to new lettings once the regulations are enforced.

FAQs: New Energy Efficiency Standards in Scotland

Q: What is the difference between EPC and HRR?
A: The EPC currently measures estimated energy costs, while HRR will focus on how well a property retains heat, providing a more accurate measure of energy efficiency.

Q: What happens if I rent out a property below Band C after 2028?
A: From April 2028, new tenancies cannot legally be granted for properties below HRR Band C. Landlords who fail to comply could face enforcement action or penalties.

Q: Will financial support be available for upgrades?
A: Yes. The Scottish Government is expected to continue offering loans and grants through programmes such as Home Energy Scotland to help landlords improve efficiency.

Q: How can I check my current EPC rating?
A: You can check or update your property’s EPC through an accredited assessor listed on the Scottish EPC Register.

Preparing for a More Sustainable Future

The move toward HRR Band C is a significant milestone in Scotland’s efforts to improve energy efficiency across the private rental sector. By acting early and planning upgrades strategically, landlords can protect their investments while offering better homes to tenants.

For more guidance on preparing your property for upcoming regulations, get in touch with Cairn to speak to our property experts.