GOVERNMENT’S decision to scrap the requirement to bring the EPC rating of rental properties up to C or higher by 2028 have left commercial landlords in limbo, according to a Northamptonshire commercial property agency.
Prime Minister Rishi Sunak announced in September that landlords will no longer have to ensure their properties carry an EPC rating of C or above for all tenancies by 2028 and for new tenancies by 2025.
However, says Prop-Search associate director Samantha Jones, owners of commercial buildings have been left uncertain whether key changes to environmental targets will affect them.
A government consultation two years ago proposed a minimum rating of C or above for residential rental properties by 2027 and of B or above by 2030. It was also thought that owner-occupied commercial property would face a similar requirement. However, says Ms Jones, two years after the consultation ended, the government has still not published the responses nor clarified the standards that commercial landlords are expected to meet.
The industry expects the minimum energy efficiency standard for commercial premises to be raised in the near future if ministers remain committed to the Net Zero target in 2050. However, the government’s announcement that it no longer requires homeowners and landlords to meet energy efficiency targets by making ‘expensive insulation upgrades” leaves the likely targets for commercial properties in doubt.
“At this stage, there is no indication when the response to the consultation will be available and whether the government will row back on its initial proposals following the recent changes to energy efficiency standards for residential premises,” Ms Jones pictured said.
“This uncertainty is undermining energy efficiency investment and adding to the already difficult and costly conditions for many commercial premises.”
Recent research by Handlesbanken Professional Landlord’s Survey revealed more than half of commercial landlords plan to invest £100,000 or more in improving the energy efficiency of their properties over the next 12 months to meet the proposed EPC standards.
Whatever the Government decides, Prop-Search is encouraging investors to look beyond the next compliance hurdle towards the broader sustainability transition under way and to consider the efficiencies and opportunities to be created by taking a long-term, strategic approach.”
Currently, all rented non-domestic properties with existing leases cannot continue to be let with an EPC rating of F or G.
