Heat Network Regulations: A Wake-Up Call For Landlords

From 27 January 2026, landlords operating heat networks and communal heating systems in England will be subject to formal regulation and enforcement by Ofgem. This marks a significant shift in the responsibilities of landlords, who will effectively become regulated energy suppliers under the new framework.

The transition to regulation is not just a technical compliance issue – it represents a fundamental change in the role landlords play. There is a danger that landlords could sleepwalk into becoming energy suppliers without the necessary governance, oversight, and strategic planning.

Unlike traditional utility companies, landlords have not historically operated under the same scrutiny or regulatory burden. Yet from 2026, they will be expected to meet standards akin to those imposed on energy suppliers—covering everything from consumer protection and billing transparency to technical performance and complaint handling.

Hodkinson Consultancy recommends that landlords establish robust procedures and governance structures, starting at Board level. This is not a task for operational teams alone. Just as a utility company would not begin offering landlord services without Board approval and likely a dedicated corporate entity, landlords must now consider whether their current organisational setup is fit for purpose.

This includes:

• Board-level oversight of heat network operations
• Clear accountability structures
• Dedicated resources for compliance and customer service
• Strategic planning for future regulatory changes

While the regulatory framework is becoming clearer, significant uncertainty remains around the exact authorisation conditions and operational requirements that Ofgem will enforce. Landlords should not wait for full clarity before acting. Instead, they should begin preparing now—reviewing their heat network operations, assessing risks, and considering whether a separate entity or team should manage these services.  Options are also available to outsource some of these responsibilities, ranging from audit and compliance reviews to subcontracting of specific services or even a full transfer of the heat network to an ESCO.

The regulation of heat networks is a landmark moment for the housing sector. Landlords must treat this as a strategic shift, not just a compliance exercise. By acting now, they can avoid costly enforcement action and ensure they are delivering safe, fair, and transparent energy services to their residents.