Whether you own properties in Scotland or England and Wales, you should be aware of new energy performance regulations that are coming into force, firstly in Scotland in September, and then in England and Wales in 2018.

Energy performance regulations in Scotland

Scotland’s new energy performance regulations, known as Section 63, came into force on 1 September 2016.

The changes require property owners to produce an Action Plan for Carbon and Energy Performance (ACEP) at the point of marketing a non-domestic building for sale or let, outlining the measures the new owner should take to improve its energy performance. The required works could vary significantly from property to property, but may include changes to lighting, heating, cooling and ventilation systems.

Energy performance regulations in England and Wales

In England and Wales, landlords will need to meet Minimum Energy Efficiency Standards (MEES), which require a building to achieve at least an ‘E’ Energy Performance Certificate rating.

Lack of awareness

There will be financial penalties – in Scotland, England and Wales – for letting out properties that do not comply with the relevant regulations.

MEES also presents a challenge for smaller portfolios.

In the event of a substantial loss, it might cost significantly more to reinstate a property in a way that improves its energy performance to meet EPC requirements. The cost of reinstatement could exceed the sum insured, leaving you at risk of underinsurance.