Communal HeatingCompliance

Ofgem heat network regulation: what it means for leasehold blocks

If one boiler or heat pump provides heating or hot water to the flats in your building, your block is likely to have a heat network. Ofgem has regulated heat networks in Great Britain since 27 January 2026. This guide explains what that means for freeholders, residents' management companies (RMCs), right to manage (RTM) companies and managing agents in England.

Last checked against official sources: 5 October 2026

What counts as a heat network

Ofgem regulates two kinds of heat network. A communal heat network supplies heating, cooling or hot water to a single building divided into separate premises, such as a block of flats. A district heat network supplies two or more buildings.

Signs that your block has one include a plant room, a heat interface unit in each flat, heat meters, or a heating line in the service charge budget. A shared system that supplies only hot water to several flats can still count.

You can check your building in a few minutes with our free scope check.

Two exemptions

The Heat Networks (Market Framework) (Great Britain) Regulations 2025 exempt two situations: a heat network that only serves a single house in multiple occupation, and a heat network that only serves a single converted building with no more than one source appliance of 45 kW or less. Most purpose-built blocks of flats are not exempt. Our guide to heat network exemptions explains both.

Who is responsible

The rules apply to whoever operates the network and whoever supplies heat through it. The operator controls the heating system and the key decisions about it. The supplier handles the commercial side: setting charges, billing, customer service and complaints. One organisation often does both.

Ofgem says that in leasehold blocks the operator is typically the freeholder, because the freeholder generally keeps overall responsibility for the building's communal system. Where there is a right to manage or residents' management company, the role may shift to that company. See operator vs supplier.

What applies now

Existing operators and suppliers are "deemed authorised", so the authorisation conditions already apply to them. The main things a block needs to have in hand are:

  • A complaints handling procedure that you follow, display or signpost in the building, and bring to residents' attention at least once a year, including the route to the Energy Ombudsman.
  • Membership of the Energy Ombudsman's scheme. The Energy Ombudsman says all regulated heat networks must register as members.
  • A Priority Services Register for residents in vulnerable situations, with free priority services.
  • A continuity plan and a material asset register, so the network could be handed to a successor.
  • Clear information for residents about who supplies their heat, how charges are worked out and where to get free advice.
  • An enquiry service that can receive enquiries 24 hours a day. Ofgem says you don't have to respond outside usual working hours.
  • Fit and proper people in positions of significant managerial responsibility or influence.

The registration deadline

Ofgem says existing heat networks must be registered on its digital service by 26 January 2027. Each heat network is registered separately and gets its own confirmation with a unique ID. Registration is not an assessment or approval. Our step-by-step registration guide explains what you'll need.

Leases and service charges

Ofgem's guidance says a lease, tenancy agreement or service charge agreement can be a heat supply contract. Where heat is paid for through the service charge, section 20B of the Landlord and Tenant Act 1985 takes precedence over Ofgem's 12-month back-billing limit, and Ofgem says the First-tier Tribunal remains the main route for leaseholders' service charge disputes. See back-billing and service charges.

What comes next

The government plans a Heat Network Technical Assurance Scheme (HNTAS), with regulatory commencement planned for 2027. It consulted on proposals in 2026, including staged milestones for existing networks. The details are not final, and nobody can be HNTAS certified yet. See HNTAS explained.

Questions

Does Ofgem regulation apply to small blocks?
Yes, if one heating system supplies heating, cooling or hot water to separate flats, unless one of the two exemptions applies. There is no general exemption based on the number of flats.
Our heating is paid through the service charge. Do the rules still apply?
Yes. Ofgem's rules recognise service charge arrangements. Some housing law takes precedence, such as section 20B of the Landlord and Tenant Act 1985.
Does our managing agent register for us?
A managing agent can do the work, but the registration is for the organisation that operates or supplies the network, such as the freeholder or your company. Agree who is doing what in writing.
What happens if we do nothing?
Ofgem says its priority in the first year is to understand the sector and to regulate proportionately. It can also take enforcement action, including financial penalties and consumer redress orders.

Sources

Related guides

How to register a heat network with Ofgem

A step-by-step guide to registering an existing heat network on Ofgem's digital service by 26 January 2027: who registers, what you need and what happens next.

Heat network operator vs supplier: who is responsible?

Who is the operator and who is the supplier of a heat network in a leasehold block: freeholder, RMC, RTM company or managing agent? Ofgem's view explained.

Heat network exemptions: HMOs and the 45 kW rule

Two kinds of building are exempt from Ofgem heat network regulation. What regulation 13(2) says about HMOs and converted buildings with one small boiler.