One in ten commercial buildings drop into danger zone as energy efficiency legislation looms


More than one in ten commercial buildings previously deemed to be above the minimum energy efficiency standards to avoid falling foul of new legislation may actually now be F or G rated.

That should worry landlords given that the new laws come into force on 1 April.

The new Minimum Energy Efficiency Standards (MEES) mean public and private sector non-domestic landlords may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G.

From 2023, landlords will not be able to lease buildings with an energy efficiency rating lower than E.

Energy data firm arbnco has run a number of simulations using EPC data from around 3,500 ‘well managed’ commercial buildings. It has previously warned that the data suggests a third more buildings than thought could prove unlettable.

Of those buildings, its latest modelling finds 18% have now dropped down at least one EPC rating band, with 11% of properties on its platform falling to an F or G rating.

Overall, arbnco said 15% of properties on its platform are now rated F or G, deeming them ‘sub-standard’ and non-compliant with MEES.

Extrapolating that figure nationally, the firm estimates that up to £130bn of UK commercial property could be at risk of falling foul of MEES.

Overall, some 60% of properties on the platform are now rated D, E, F or G,which the company said illustrates highly rated properties have become more difficult to achieve.

Simon West, co-founder and director at arbnco, said the data suggests that property owners are “failing to heed warnings” and now have less than two months to mitigate potential negative impact on the value of their buildings.

He said the findings should serve “as a stark warning” and advised landlords to centralise and manage EPC buildings data to enable targeted improvements.

The government published MEES guidance for landlords last year. While there are some stiff penalties for non-compliant buildings, improvement works must be deemed viable and landlords can self-certify exemptions.

See this link for details.

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