The difference in rental value between energy efficient properties and those yet to be updated will become more and more pronounced, a renewable energy specialist told a conference held in Edinburgh yesterday (February 7).

Improving the energy performance of a property portfolio should not be a compliance cost but something that provides a positive return on investment as well as providing additional benefits, Strutt & Parker land agent Andrew Duncan told an audience of more than 100 property professionals at the firm's Scottish Property Seminar held in Edinburgh's Royal College of Physicians.

Arguing for a strategic and holistic approach to renewable energy, Mr Duncan said: "Evidence from the US and Europe, both of whom have been addressing this for longer than we have, is showing a discount on properties which are expensive to occupy and this is something that we are beginning to see in the rental market."

He added that the Energy Act 2011 will have a particular impact on the owners of rural property. From April 2018, it will become illegal to let a property with an 'F' or 'G' EPC rating and by April 2016, tenants' reasonable requests for energy efficiency improvements cannot be refused. From April this year, property will need to score an EPC rating of 'C' or better to qualify for Feed-in Tariffs.

"All of this will have a major impact on typically inefficient rural property and I believe that this will only be the start."

He added: "The interest in projects benefiting from the Feed-in Tariff has far exceeded the Government's predictions but the tariff levels are set for review and we are expecting an announcement on Thursday as to what the revised levels will be from April. Worryingly we heard recently that the FIT scheme was in the red for 2011 and 2012 already with massive overspend predicted to the end of the scheme. It is not therefore just going to be solar that will feel the squeeze. The budget has however been increased by a further £197m already this year."

Turning to electricity generation, Mr Duncan said wind still offered the best potential returns on the right sites but was the most controversial, time consuming and expensive in terms of upfront costs. A renewed interest in wind farm sites from developers has led Renewable UK to predict the commissioning of 2GW of wind power each year for the next five years which works out at 1,000 wind turbines a year.

"The cumulative visual impact is locally becoming a bigger issue and I believe that there will come a point where local authorities put the brakes on approving applications until the schemes in the system are up and running."

He added hydropower was the focus for electricity generation currently in Scotland and offered Strutt & Parker farm and estate clients an excellent long term solution. "The topography, water courses and reliable rainfall necessary makes Scotland ideally suited to small to medium scale schemes."

Mr Duncan said: "The coming years will therefore present our clients with a number of energy-related threats and opportunities. An energy strategy helps develop long term solutions to reduce energy costs, meet energy needs and ensures that investment is focused to maximise returns - both new ones and also protecting existing ones - as well as making sure that proposals fit with the owners' aspirations."

The strategy will prepare the estate to respond to the Green Deal and future letting restrictions. We firmly believe that property owners should invest time in stepping back and considering their energy costs and the potential opportunities."

Also speaking at the conference was land agent Michael Laing, who addressed the delegates on the challenges facing those involved in the management of estates. The uncertainty surrounding the reform of the Common Agricultural Policy (CAP) was of particular concern.

Mr Laing said: "Much of the detail has yet to be thrashed out but what we do know is that there is likely to be a reduction on the total CAP budget; approximately 1 million hectares which is not currently used to claim Single Farm Payments in Scotland is likely to be brought under control of the scheme; and it is anticipated that payments will be made on a flat rate meaning that a reduced budget will be spread more thinly."

He added: "The changes, whatever they might be, will affect every farm business and I suspect that many are simply ill-prepared for what could be a major reallocation in farm subsidy support. Although the revised arrangements are unlikely to come into effect before the 2013 IACS period, many businesses need to be taking action before then and all farming enterprises should be reviewing their business now to assess the potential impact that a major adjustment in farm subsidies would have on the viability of their businesses and start taking action to prepare for that."

He said that the Scottish Government's Rural Payments Inspectorate was already taking a much stiffer line on farmland eligibility under the threat of significant potential penalties for over-declaration.

He told the conference that other challenges facing land managers included the Wildlife & Natural Environment (Scotland) Act 2011 and the introduction of vicarious liability, the Public Services Reform (Agricultural Holdings) (Scotland) Order 2011, the Agricultural Holdings (Amendment) (Scotland) Bill and the Reservoirs (Scotland) Act 2011.

John Wright, planning expert in Strutt & Parker's Edinburgh office, addressed the delegates on the promotion of land for development through the planning process. Focusing on the new development plan system and the challenges and opportunities it brings, he urged landowners to think about their landholdings long before the plan review begins.

He said: "It really is never too early to think about promoting your land for development, but it can be too late."

He said the new development plan structure, heralded as the most "fundamental root and branch review of the planning system in Scotland for a generation" was not without its problems. "We are constantly informed of delay at each stage in the process and approximately two thirds of councils have revised their timescales outwards by anywhere up to a year."

Mr Wright said: "Strategic Development Plans, now in the late stages of being prepared for Aberdeen, Dundee, Edinburgh and Glasgow, are in some cases massively over-estimating the current effectiveness of the established land supply, especially where this contains significant brownfield, flatted housing schemes for which there is currently little developer demand. As a result, there is an under-provision of sites for development in the Local Development Plan and Reporters are increasingly being left to identify additional sites to meet the shortfall."

The delegates also heard about the Scottish sporting estate market, predictions for Edinburgh City house prices, an outlook on the new build sector and the challenges facing surveyors and valuers.