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:The terms of the exemption will protect people in the first instance. You are right to mention the six-unit limit, Mr Coffey, but there is also the point about properties being continually let. If a property becomes a short-term let, it loses the exemption. If the occupier moves into the property or it is sold, it is no longer exempt.

All of that exists to protect the tenant, but there is also rent adjudication, which I referred to in response to the convener earlier. That will still be available for tenants of build-to-rent properties. Albeit that they will not be within rent controls, they will still be able to challenge a rent if they feel that it is above the open market value. That will be considered under the rent adjudication system and there will be longer for that to take place, on account of the new powers in the 2025 act. We have also addressed the fact that the adjudication service could no longer set the rent or recommend that it be set above the level that the landlord recommended. Albeit that it is outwith rent control, so long as the conditions are met for the exemption, tenants will still have access to the rent adjudication service.

10:30

If I were a prospective tenant, I would like to be able to assess how expensive my bills might be on the basis of the property’s heat retention rating. There is empowerment and the ability to choose on that side of things. Equally, the approach can help to drive behaviour change. I appreciate that the Government has a role to play in setting standards to accompany the foundation of the new EPC, but that is a discussion for another time—I will not open that up just now.

That would largely be about our wrapper. Patrick, do you want to say a little bit about that?

Ross Loveridge will keep me right on this. Is it to go live on the 31st October next year?

I will give my view on that, and then I will let my team come in with anything else that they would like to add. First, the whole thrust of our proposed changes is to empower consumers to understand more about the buildings that they are buying or renting. To do that, we need to have accurate and up-to-date information. There is a balance to be struck between ensuring that they have such information and understanding that, as you said, the frequency with which EPCs are required creates additional obligations for building owners. To our mind, the move from 10 to five years strikes that balance. Ultimately, we are asking that a property has only one more EPC in a decade, which, to me, feels like a proportionate way to ensure up-to-date and accurate information. When the committee heard evidence, bodies such as Which?, and others, were clear on that, too.

In both the social and private rented sectors, particularly when a landlord has a large portfolio, we are not just talking about them having to make one more certificate available. We have been considering how to work with the social rented sector on a framework for the procurement of EPCs for a large number of properties. We think that that could reduce costs by up to 20 per cent. The majority of PRS landlords have one property, but I am aware and conscious that some have more. We have been working with them on guidance for reusing data, for example, when updating an EPC.

I hope that, in all those ways, we can make what I think is a proportionate change all the less burdensome. I am also interested in and open minded to the idea that the validity period could move back to 10 years once a heat retention rating C has been achieved, but we will keep that under review.

The other side of the auditing process involves the carrying out of local authorities’ enforcement obligations. Again, we are conscious of monitoring that. We are working on the extent to which local authorities are supported to understand their obligations and what is required of them. We are working with them on developing a toolkit to aid their understanding of their obligations as enforcement bodies and to help them to carry those out.

That is a really important part of getting the new system right, because the main reasons for change—other than that it will better reflect the actions that we want to see in properties in contemporary Scotland—are to make the system more readily understandable and navigable for consumers and to empower them by providing them with information. It has been important to us that the process should reflect how easily, or otherwise, users can interact with it.

Even the way in which we describe the ratings is becoming more intuitive. We now talk about “heat retention rating”, “heating systems rating” and “cost of energy rating”. All those terms have been developed in response to feedback from ordinary people who have tried to navigate the system. Those aspects ought to be intuitive. Likewise, the certificate itself has been designed so that it will be more navigable and understandable. All that is being done because we want to empower consumers.

I come back to two points. The first is the period during which the new system will be implemented, which we have chosen deliberately. It is a year until we start implementation, and then there will be a hybrid year in which both the old and the new systems can be worked. I stress our intention that the new system will be rolled out with a strong consumer engagement and communications plan. However, as I said, we should be starting from a better position, given that the new system has been designed to be more easily navigable.

I wonder whether Ross Loveridge might say a bit about the number of users with whom we have worked on developing the system. He could also address the interface point, because it is quite technical.

We are conscious that, whenever a change such as this one is made, it is seen as a fundamental change. However, I take a lot of comfort from the comparison with 2008-09, when there was a much more significant jump in the requirement to produce EPCs than what we expect now, and we have spread it over two years.

Again, reflecting on what I said earlier, I would say that the EPC is ultimately a neutral piece of work. We will have to watch much more closely to see how the regulated standards that come atop it change or impact the property market.

There is an updated process. I will swiftly hand over to the technical experts to speak to that.

Good morning. I am pleased to join the committee today to speak to the draft Energy Performance of Buildings (Scotland) Regulations 2025, which will legislate to reform energy performance certificates.

The EPC system has formed a long-standing part of Scotland’s property market since 2008 and of retained European Union law across the United Kingdom. However, the Scottish Government has heard concerns from stakeholders such as the Climate Change Committee and consumer groups such as Which? that EPCs need to change and be of higher quality. I want them to be accurate, up to date and relevant, and to give consumers the information that they need on the journey to net zero and warmer, more energy-efficient homes.

We have consulted extensively over the past four years on EPC reform. Users have been at the centre of that, helping to design a new EPC that I believe is now fit for purpose. I will be glad to share that design with the committee after our session.

The draft regulations that I have introduced do three things. First, they retain the well-established and well-understood parts of the existing EPC system, namely the existing trigger points for when an EPC is required, the standardised assessment that is carried out by suitably skilled and accredited assessors and a public register of certificates.

Secondly, they introduce the new reforms that we believe are necessary: a redesigned certificate that has been shaped by user feedback; new ratings and a new property report to ensure that consumers have clear information on current and potential fabric performance, heating systems and costs; a reduced validity period from 10 to five years to ensure that consumers have more up-to-date information; and strengthened quality assurance for EPC assessors to safeguard consumers.

Finally, they protect the property market during the transition. By introducing the regulations a year before they come into force and including a further one-year transition period, we are supporting the market to adjust to the new regime. That will be underpinned by a clear communications and engagement campaign. Consumers will also benefit from an interactive interface for a more dynamic EPC and through the heat and energy efficiency technical suitability assessment.

That is what today’s reform regulations will do, but I should be clear that they do not mandate property owners to meet an energy efficiency standard. We have consulted separately on those matters, but decisions have yet to be taken.

By introducing the reformed EPC and the new rating systems as a first step, we are providing a foundation for our wider heat in buildings programme, giving certainty to all sectors on how we will measure energy performance and any future standards that might be linked to that. My officials and I will be glad to discuss that with the committee.