From 1 April 2018, the Energy Efficiency in Buildings Regulations 2015 will prohibit the letting of properties which do not meet the prescribed minimum energy performance standards.
All commercial properties let after this date will need to comply with a minimum “E” rating. Some tenants are already only considering properties with a “D” rating or above. Some estimates indicate that nearly 20% of buildings are rated “F” or “G” and there is a strong chance that many of those with a current “E” rating would not achieve the same rating under the 2018 standards.
There is an additional requirement to secure a minimum “E” rating on all commercial properties by April 2023.
Pressure is mounting for landlords to comply. In recent months, lenders have started to refuse loans for the purchase of properties rated at “F” or “G”. Property values are also being impacted as the Royal Institution of Chartered Surveyors requires energy and sustainability issues to be taken into account when valuing properties.
Whilst improvement measures do not necessarily require a massive investment, landlords should be commissioning up to date Energy Performance Certificates to establish the level of investment required and to evaluate the energy performance of their buildings.
