Navigating the HEM Delay, Heat Pump Realities, and the New 4-Metric EPC

If there is one thing we have learned over the years in building compliance, it is that the goalposts are always moving. This week has brought some significant announcements that will directly impact how you design, build, and manage your properties over the next few years. The much-anticipated Home Energy Model (HEM) has been delayed, heat pumps are cementing their place as the default for new builds under Part L 2026, and the EPC system is getting its biggest overhaul in a decade a new four-metric system that changes the rules for landlords and developers alike.

On 8 June 2026, the government confirmed that the Home Energy Model (HEM) the long-awaited successor to SAP, will not be launching alongside the Future Homes Standard as originally planned. The decision was taken during the final stages of internal assurance, with the government citing the need to ensure the model is fully robust before it goes live. SAP 10.3 therefore remains the only approved compliance methodology for new homes.

HEM represents a fundamental shift in how we assess residential energy performance. Rather than SAP’s simplified monthly calculation periods, HEM moves to half-hourly intervals, a far more granular approach designed to capture how modern, highly electrified homes actually perform. It will better reflect the complex interactions between heat pumps, solar PV, battery storage, smart controls, and domestic hot water demand. Once approved, HEM and SAP 10.3 will run in parallel for at least 24 months before SAP is retired.

Critically, HEM is expected to make it significantly harder to offset poor fabric performance with renewable technology bolt-ons, closing the well-documented performance gap between modelled and actual energy use.

What This Means for Your Projects

When HEM does arrive, it will reward fabric-first design and penalise schemes that rely on PV offsets to paper over thermal performance gaps. We strongly advise designing with HEM principles in mind now, so your future phases are not caught out when the methodology switches.

The government has confirmed a major overhaul of the Energy Performance Certificate system. The current single A-G rating heavily skewed by estimated energy costs is being replaced by a new four-metric framework, now confirmed for launch in the second half of 2027. The four metrics are:

• Fabric Performance — how well the building retains heat through insulation, glazing, and draught-proofing.
• Heating System — the efficiency and carbon intensity of the heat source.
• Smart Readiness — the capacity to integrate with smart controls and demand-response technology.
• Estimated Energy Cost — an annual running-cost indicator for occupants.

Crucially, while the EPC format is being delayed until 2027, the deadline for all private rentals to reach a minimum EPC C equivalent by October 2030 has not moved. The government has also confirmed a £10,000 cost cap for landlords making these upgrades, up from the current £3,500, with any spending on energy efficiency measures from October 2025 counting towards that cap.

Under the proposed rules, gas heating will be capped at Band D on the new Heating System metric. To reach an overall Band C, a gas-heated property will need to demonstrate strong fabric performance and/or smart readiness. Fabric upgrades are therefore no longer optional — they are the cornerstone of compliance.