Tougher energy efficiency rules will be applied to the commercial property sector from April 2018. With 12 months to go before their introduction, what must landlords now prepare for?<\/p>\n
Britain\u2019s commercial property owners have been urged to improve the sustainability of their portfolios, as the Government seeks to clamp down on poor-performing buildings.<\/p>\n
With tougher energy efficiency standards coming into force next year, ministers have issued a timely reminder to landlords about what\u2019s expected of them. Failure to comply with the revised rules could ultimately lead to financial penalties and reputational damage.<\/p>\n
So why is energy efficiency still such a hot topic in the UK property industry, and what changes will landlords have to make between now and 2018?<\/p>\n
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Why energy efficiency matters Looking at the wider picture, measures such as insulation, double-glazing, renewables and eco-friendly boilers are also capable of delivering a financial boost. For tenants, this can take the form of savings on their energy bills. Landlords, meanwhile, can enhance their reputation within the market. This positive reputation could help them save money by cutting down the expenditure that would otherwise have been spent marketing their properties. This increased marketability could in turn mean reduced void periods.<\/p>\n Despite these common benefits, ministers are concerned about the current pace of change, with recent government figures suggesting that non-domestic buildings still account for roughly 12% of the country\u2019s emissions [SC1]. That\u2019s why they\u2019re asking commercial property owners to comply with tougher standards from next spring\u2026<\/p>\n <\/p>\n What the changes mean for landlords Under the regulations, privately-rented non-domestic properties in England and Wales will need to meet a minimum energy efficiency level in order to be let to tenants. Such properties will be required to achieve an Energy Performance Certificate rating of at least band \u2018E\u2019.<\/p>\n Landlords with properties rated \u2018F\u2019 or \u2018G\u2019 won\u2019t be able to agree fresh tenancies with new or existing tenants from next April. And from 2023 onwards, they won\u2019t be able to let a property under an existing rolling agreement unless it has an \u2018E\u2019 rating either.<\/p>\n Local weights and measures authorities will have the power to hand penalty notices to landlords who fail to comply with the higher standards. The names of such landlords might also be made public.<\/p>\n However, landlords with genuine concerns about their ability to make energy efficiency improvements in time might be eligible for an exemption. Taking one example, they could be made exempt if they\u2019re unable to secure the consents that are needed to proceed with large-scale changes. This might include consent from a mortgagee or a superior landlord, or it could take the form of listed building consent.<\/p>\n Detailed guidance on all the ins and outs of the rules is now available directly from the Government.<\/p>\n <\/p>\n
\n<\/strong>It\u2019s not hard to see why sustainability remains a key watchword in both the residential and commercial property markets. In the simplest terms, energy efficient buildings can offer environmental advantages by lowering carbon emissions and cutting waste.<\/p>\n
\n<\/strong>The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, to give them their full name, will take effect from April 1, 2018.<\/p>\n