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Publication - Consultation Paper

Private rented housing energy efficiency: consultation assessment (part one)

Published: 7 Apr 2017
Part of:

Partial business and regulatory impact assessment (BRIA) of our consultation on efficiency and condition standards.

45 page PDF


45 page PDF


Private rented housing energy efficiency: consultation assessment (part one)

45 page PDF



1. The National Outcomes form part of the National Performance Framework, available at

2. Scottish Greenhouse Gas Emissions 2014, available at

3. Available at /publications/draft-climate-change-plan-draft-third-report-policies-proposals-2017/


5. See Energy Statistics Summary - September 2016, at

6. Draft Scottish Energy Strategy: The Future of Energy in Scotland, available at /publications/scottish-energy-strategy-future-energy-scotland/




10. The housing chapter in the Scottish Household Survey, 2015, has a range of information on the households and properties in the private rented sector, see /publications/scotlands-people-results-2015-scottish-household-survey//4.


12. Scottish Household Survey, 2015, available at /publications/scotlands-people-results-2015-scottish-household-survey/.

13. Scottish House Condition Survey, 2015, available at /publications/scottish-house-condition-survey-2015-key-findings/.

14. SAP 2012, the most recent methodology, was first used in the reporting data in 2014, meaning that only two years of data are available, which show an increase in the mean EER from 62 to 63. However, data based on the previous methodology, SAP 2009, are available for 5 years, and show an increase from 60 in 2010 to 65 in 2015.

15. There are small differences in estimates of the number of dwellings in different tenures between the Scottish Household Survey and Scottish House Condition Survey due to the different weighting methodologies.

16. SAP 2009 is used to give a longer time series, as data based on SAP 2012 is only available for 2014 and 2015.

17. Dwellings built after 1982 are presumed insulated when built due to building regulations, and therefore do not require retrofitting. The proportions in the graph are therefore expressed in relation to all pre-1982 cavity wall dwellings.

18. For example, buyers may be the party who directly pays for a tax on goods and services, but the economic impact depends on the price elasticity (sensitivity) of buyers relative to sellers for each particular good or service.

19. In the economics literature, this is referred to as a negative externality, which is a type of market failure which arises when there are costs to society which are not reflected in the market transaction.

20. Figure 4, Scottish House Condition Survey, 2015.

21. Marmot Review Team (2011). "The Health Impacts of Cold Homes and Fuel Poverty". Available at:

22. Hills (2012). "Getting the measures of fuel poverty, Final Report of the Fuel Poverty Review". Available at:

23. Cochrane Systematic Review (2013). Available at:

24. "Evidence Review of the Potential Wider Impacts of Climate change Mitigation Options: Built Environment Sector", available at

25. "Public health benefits of strategies to reduce greenhouse-gas emissions: household energy", available at

26. In order to obtain the health benefits from energy efficiency upgrades, the measures must be installed, operated, and maintained correctly, e.g. to avoid issues such as mould growth arising due to insufficient ventilation when insulation is applied.


28. The research, undertaken by Ipsos MORI Scotland and Alembic Research, is available at

29. Data was combined from the 2010, 2011 and 2012 surveys in order to obtain a more fine-grained representation of dwelling types present in the housing stock.

30. The version of SAP used was SAP 2012 version 9.92, the latest version of SAP which also forms the basis of the proposed minimum EPCs proposed in this consultation.

31. It is assumed that, within a particular EPC band, the percentage share of each housing archetype is the same as in the dataset used in the independent research.

32. This assumption is in line with the UK Government approach (see, which draws on a 2009 report by Ecofys, "The hidden costs and benefits of domestic energy efficiency and carbon saving measures", available at

33. These differences can arise due to factors such as imperfect installation, obstructions to insulating parts of walls ( e.g. due to garages or conservatories), and natural variations in the thermal performance of structural and fabric elements that cannot be fully determined by the assessment, e.g. the u-values of uninsulated walls.

34. Annex 6 of the Green Book, Appraisal and Evaluation in Central Government, available at

35. For example, minimum boiler efficiencies for replacements are set through building regulations - Standard 6.3 in the Domestic Technical Handbook.


37. There has been a significant increase in the share of the private rented sector over the last decade, combined with a decline in the share of the owner-occupied sector. The impact of tenure change on the number of low EPC dwellings in the private rented sector in the future depends not only on whether this trend continues, but also on the energy efficiency characteristics of stock that moves between sectors. Scottish Ministers intend to consult from Winter 2017/18 on energy efficiency in the owner-occupier sector, and should this ultimately lead to the introduction of minimum standards in that sector in future, then any effect from the movement of dwellings between tenures will be reduced.

38. Although new build regulations do not prescribe a minimum EPC, the carbon emission targets that they set mean that it is highly unlikely that a dwelling with an EPC below D would be in compliance with the regulations.

39. Because it is assumed that costs and benefits will grow in line with inflation, in real terms it will not make a difference to average costs and benefits measured in today's prices if upgrades are modelled as taking place in the future. It will, though, affect the net present value, reducing these values purely because the discount rate reflects the assumption that a cost or benefit in the future is given less weight than the same cost or benefit today.

40. The data in Table 2 relating to the turnover profile for all dwellings is used, since this provision will apply to dwellings regardless of their EPC. It is assumed that all dwellings obtain an EPC, although as was discussed above, landlords who believe that their dwelling is below an E can just commission a minimum standards assessment. The Scottish Household Survey estimates that the number of dwellings in the private rented sector in 2009 was around 240,000.

41. As discussed above, for dwellings with an initial EPC of F or G, the costs could be somewhat higher if landlords choose to upgrade in stages, rather than choosing the least-cost package of raising their dwellings directly to a D.


Email: Denise Buchanan