EPC and commercial properties

[tescorank]

So time is up for nearly one fifth of UK landlords (18%) who still have commercial properties with an energy performance certificate (EPC) rating of F or G, according to research by RSM UK.

The audit, tax and consulting firm’s findings are a cause of concern for the sector, with new legislation coming into force on 1 April 2023 stating that commercial let properties must have a minimum EPC rating of E by this date.

The government has further ambitions to make it unlawful to let commercial property below an EPC B rating by 2030. However, findings from RSM’s annual Real Estate 360 survey show that 52% of landlords did not consider these timelines achievable for the majority of commercial property owners. Just over a third (36%) of respondents believed the timelines to be achievable, while 12% remained unsure on the outcome.

Additionally, 40% of real estate businesses confirmed they had written plans and strategies in place relating to their environmental, social and governance (ESG) commitments, whereas 44% confirmed they didn’t have ESG strategies.

However, more positively, 30% of respondents slightly or strongly disagreed that the UK’s real estate sector is making quick enough progress to reduce its carbon footprint in line with the UK government’s net zero targets, down from 39% the previous year. Similarly, 41% of businesses surveyed slightly or strongly agreed that enough was being done, a slight (4%) increase on the previous year.

More than a third (43%) of landlords believed that the government’s attitude towards making progress on environmental goals would encourage them to act on investing in ESG friendly solutions, with 58% also completely or somewhat understanding the ESG agenda.

Conversely, landlords perceived the biggest barrier to decarbonising the real estate sector to be lack of landlord willpower to invest in environmentally solutions (33%), the impact of the energy crisis (32%), and the lack of cost-effective tech solutions (30%).

Stacy Eden, partner and head of real estate at RSM, commented: “Our Real Estate 360 survey highlights the real challenges landlords are currently facing, with the focus on the ESG agenda both presenting an opportunity to innovate as well as barriers to overcome.

“Although it is encouraging to see landlords respond well to the government’s approach on environmental solutions so far, there remains real concerns, especially with landlord willpower being the biggest barriers to decarbonisation.

“More worryingly, almost one fifth of landlords own commercial property which will be deemed unlawful to let as of April 2023, which has further implications for landlords and their income streams. With further EPC legislation expected to arrive by 2030, government support is needed, or we could start to see a black hole in the rental market.

Needless to say given the timescales and a fact that 20% of business premises have never had a EPC done at all, the government may sweep this under the table alongside the similar ridiculous residential requirements~cladding~heat pumps~coming up in the next few years.

Carbon dreaming I call it !

Edited by tescorank on Friday 24th February 14:59

[Rufus Stone]

Are we supposed to get an EPC to check if one currently does not exist?

[Equus]

tescorank said:

...new legislation coming into force on 1 April 2023 stating that commercial let properties must have a minimum EPC rating of E by this date.

Ah, good old PistonHeads!

Never let the truth get in the way of a meandering, reactionary rant.

If your property can't reasonably achieve an EPC rating of E, all you have to do is APPLY FOR AN EXEMPTION

[22]

Equus said:

Ah, good old PistonHeads!

Never let the truth get in the way of a meandering, reactionary rant.

If your property can't reasonably achieve an EPC rating of E, all you have to do is APPLY FOR AN EXEMPTION

That looks like domestic, is it similar for commercial?

[Equus]

22 said:

That looks like domestic, is it similar for commercial?

Yes. That was the best direct-from-government link I could find, but the same approach applies to all buildings that fall under the MEES regulations.

LINK

ETA: also note that this is not new legislation. 2023 is effectively just the cut-off date for a transitional period that has run from 2018 and that was based on legislation that passed into law in 2015.

Landlords have had 5-8 years to find their way from their arse to their elbow. If they have not managed to do so, they really have no business being in business.

Edited by Equus on Friday 24th February 19:04

[isleofthorns]

it says industrial units are potentially exempt, if they are low-energy using,

Are there guidelines as to what criteria this involves?

[Equus]

isleofthorns said:

it says industrial units are potentially exempt, if they are low-energy using,

Are there guidelines as to what criteria this involves?

" ...buildings or parts of buildings where the space is not generally heated or cooled other than by process heat, or buildings or parts of buildings that only require heating or cooling for short periods each year, such as during critical periods in the production cycle (e.g. plant germination, egg hatching) or during very severe weather conditions."

[N111BJG]

It’s a complete waste of everyone’s time

I’m a surveyor & routinely inspect a variety of buildings, over the few weeks on the non-domestic side, there have been two banks, a ‘pound shop’ style supermarket and book shop that is changing into a coffee shop. All over 100 years old & only the last one has ever had an EPC.

The construction of all of them never had any regard to energy conservation & in domestic terms would compare with draughty uninsulated Victoria terraced property and in reality no hope of ever having a reasonable energy rating. Yet the one that has one is rated C, what an absolute joke.

[isleofthorns]

Equus said:

" ...buildings or parts of buildings where the space is not generally heated or cooled other than by process heat, or buildings or parts of buildings that only require heating or cooling for short periods each year, such as during critical periods in the production cycle (e.g. plant germination, egg hatching) or during very severe weather conditions."

thanks, I looked up the same in the meantime. I've got a garage let since 2009 - I can't find an epc on the register but vaguely remember it being done at the time. Will have to look it up or get one done asap!!