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The property consulting firm warns about urgent energy efficiency improvements

The Government’s White Paper on minimum energy efficiency standards (MEES) in privately rented commercial buildings was released in March, reiterating the previously stated policy that an EPC rating of B or above will be required starting in 2030. The target is to achieve a 50% reduction in carbon emissions by 2030, which seems an ambitious expectation of the UK’s managers and landlords.

Expert opinion

The criteria for achieving a rating of C or higher were set out in the consultation together with the Department’s concept of using a third party to administer the scheme now called Energy Performance Certification. Experts including estate agents in Sittingbourne opines that the way forward is well documented with draft regulations available. The early deadline of April 2025 will apply to premises with an Energy Performance Certificate (EPC) rating at or below C, without exemptions as at present. The improved initiative has now been named EPC Rating Scheme.

New energy standards will reduce the availability of new investment, but there is still an opportunity for those who can affect and change the existing stock. Buildings that are unaffected now will fall into disrepair as landlords only invest in properties that will generate a return. Buildings that require significant investment to meet current standards will see values dramatically reduced as these costs are taken directly from the potential rental income for both commercial and residential. If a building classed as non-compliant does not invest, it will be demolished to make way for modern buildings that comply with all current building regulations, and have EU funding available.

What lies ahead

The EPC changes scheduled for 2025 aim to improve the energy efficiency of a building and have the effect of raising the rating on the EPC certificate. Landlords of office premises throughout the country must plan now their schedules for bringing their premises up to the new standards by target dates that are being set by the government. Contractors, builders and landlords will need to tie in with and/or renegotiate leases with their tenants when those leases end and when new tenants take over vacated premises. As the target dates approach for the new stricter energy performance standards, more landlords in office premises are beginning to worry if they will be able to meet these standards. Meanwhile, other landlords of office premises are planning ahead and securing trades to get their work done before it becomes increasingly difficult to organize trades and get them done. These landlords will be more equipped to take on future challenges.

Your small-to-medium-sized enterprise could be sleepwalking toward disaster. An interesting statistic from the DBEIS suggests that 31% of national carbon emissions are attributable to small enterprises based on the BEES survey. This figure may seem quite high, but it’s just a fact. You know your business and how it works intimately. Still, energy efficiency appears to be far too low on your list of priorities

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 are clear in their requirement that privately rented housing in England and in the region of Wales achieve a E rating as a minimum energy efficiency before granting a new tenancy. If you obtain an EPC prior to the grant of your new tenancy, we can issue you with a certificate confirming this, which will help ensure the smooth transition of all tenancies when the regulations take effect. It is a legal requirement for properties offered for let in England and Wales to meet minimum energy efficiency standards from 1 April 2018. The requirement will be extended to all privately-rented (including non-domestic) property by 2023.

National PRS Exemptions Register

Householders and landlords must register their exemption claim with their local authority. The PRS Exemptions Register is designed to help people find out more information about applying to seek exemption from minimum energy efficiency standard for a property that achieves EPC ratings F or G, so that they can make an informed decision about whether to seek registration or not.

The Energy White Paper by the government which was released in October 2018, mentioned that to bring about a rule to make it unlawful of letting of commercial property with an energy performance certificate (EPC) rating of below B by 2030. This free register is an exhaustive list of properties in the UK that are eligible for an EPC exemption from a new regulation, which will require all commercial properties to have an EPC rating of B or above by 2030. This update covers the period from 3 September 2018 to 1 January 2019. The government has confirmed that anyone buying a property with an EPC rating below B will be unable to complete the purchase. This will affect a large part of the UK property market, including all but the most expensive free-standing homes and some new build apartments. There are also exemptions, depending on how old a building is, or whether it has been refurbished in the last 15 years

The Government amended the Building Regulations 2010 to require all non-domestic buildings in scope of the Energy Efficiency Scheme for Buildings (MEES) to be provided with an EPC by April 2025. This includes commercial landlords who must register any building that does not qualify for a rating of C or above. There will be a gradual transition to 25% of these buildings being required to attain a rating of B or above by April 2026 including an increased number of buildings which have been registered as exempt from an Energy Performance Certificate. Thereafter, further adjustments will lead to all non-domestic buildings in scope of the scheme requiring a B Rating or equivalent by April 2028.

The government is proposing a regulatory reform that would require landlords to disclose energy performance information for their private rented sector property to a new online database. The aim of the proposal is to better inform private renters of the energy efficiency of their properties, so that they can improve those properties if they so choose.

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