Speaking at the Scottish Rural and Islands Conference held last week in Glencoe, the Regulator’s deputy chair Andrew Watson said most landlords are facing uncertain but significant and new costs for investing in energy efficiency and achieving the decarbonisation of heating. This, he added, is in the context of a rent freeze until March 2023 and uncertainty in what rent increases may be permitted from April onward.

The conference’s main theme was energy efficiency and the obligations landlords need to meet around net-zero decarbonisation. In his speech to the conference, Andrew Watson also highlighted that many landlords continue to invest in building new homes at a time of increasing costs for, and supply shortages in, labour and materials.

He said: “It is now even more vital that landlords vigorously challenge every element of their expenditure to ensure that it is necessary. Landlords will also need to be able to demonstrate – principally to their tenants – that they are operating as efficiently as possible. Any planned increase in rents that is permitted needs to represent value for money, whether that’s to pay for energy efficiency measures or anything else.

“And landlords should continue to have meaningful and effective dialogue with tenants around what is important to them and what they want, and can afford, to pay for. As part of that, landlords should consider how the net zero and other relevant obligations placed upon them are weaved into these conversations.”

The full speech is available here.