Tighter energy efficiency standards for commercial buildings 1 Aug 2021
Tighter energy efficiency standards for commercial buildings:
Minimum Energy Performance of Buildings Bill
Last week saw the introduction of a bill into the Houses of Parliament, which will increase pressure on the private rented sector to increase energy efficiency.
Backers of the Bill wish to see it assist the government in ensuring:
- that all private rental homes are rated EPC band C or below by 2027,
- rented non-domestic buildings must be EPC Band B by 2030,
- and that all residential homes should be EPC band C by 2035.
How will this affect the commercial rental sector?
As part of their goals for the UK to have ‘net zero’ carbon emissions by 2050, the UK government is looking to implement a series of measures aimed at cutting the carbon footprint of commercial buildings – not unreasonable, given that the government estimates around half of the energy used by UK business can be attributed to the running of non-domestic buildings.
These new measures include:
- A dramatic improvement of commercial buildings, with businesses set to benefit by making huge savings in energy bills by 2030 (it is estimated up to £1 billion.) This includes a consultation on the energy performance of commercial buildings in the private rented sector, and what improvements can be made.
- Stricter requirements under the Minimum Energy Efficiency Standards (MEES) setting EPC requirements to band B by 2030 ‘could reduce UK emissions by the equivalent of half a million homes – roughly the size of Birmingham’, according to the government.
The UK government’s plan to achieve net-zero carbon emissions has been set out in law under the 2008 Climate Change Act, and so it’s likely that these consultations will be preceded by legislation.
What does this mean for commercial landlords?
Although nothing has been set in stone quite yet, it’s part of an inevitable shift towards reducing overall emissions in the UK, so landlords should be thinking about taking action, in order to achieve the minimum energy performance requirements.
The 2015 Energy Efficiency Regulations (MEES Regulations) stipulated that all new tenancies in private rented properties must achieve an EPC rating of an E as the absolute minimum by 1 May 2018 making it an offence for landlords to let any property that did not achieve an E rating unless it was subject to a valid exception.
In 2019 the government laid out plans for non-residential properties to achieve an EPC rating of B, or the highest band a property could reach cost-effectively by 2030. What happened in the private rental sector, was that close to the deadline tradespeople became scarce as so many people were looking to get works completed which caused delays.
So, although plans haven’t yet been fully fleshed out, commercial landlords can prepare for changes by taking stock of their properties to find out which may need work to bring them up to standard, as well as getting a better idea of what work might be required.
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Get in touch with Joel
I have been a part of the Perry Holt team since 2008 whereby my knowledge on the commercial markets across South West Hertfordshire has grown extensively. I oversee the commercial agency department for all sectors, this ranges from small retail units to large industrial off-market sales.
My client range is very extensive incorporating large institutional funds to small one off landlords. I pride myself on being one of the leading agents in Watford and surrounding areas due to building fantastic relationships with local occupiers and landlords. One thing I am most proud of is being responsible in my time for nearly £200 million in sales and acquisitions.
Outside of work I am a family man with Gizmo the dog and enjoy good food & company.