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Commercial Landlords face epc challenge

Published: 12/05/2023

April saw the change in Minimum Energy Efficiency Standards (MEES) which made it illegal to let commercial property with an EPC rating below E. The ban applies to both new and existing tenancies in England and Wales and landlords will not be able to rely on having long leases or think that MEES isn’t their concern.

Research by Savills indicates that around 3% of office space and 11% of retail space will be affected, which equates to hundreds and thousands of square feet! The MEES regulations are currently based on EPC’s however this is a contentious issue as many experts believe that this method is flawed.
Industry and government are already looking to amend the system as it doesn’t consider the building occupants’ energy use, which is the biggest driver in energy consumption.
An example of its flaws is that some companies aiming for net zero are even able to reduce their EPC rating without making any changes to their buildings at all, just because the electricity grid is using more renewable energy!

For there to be an effective move towards decarbonisation, the commercial sector needs to adopt a performance-based rating system like the one proposed by the government in 2021. This proposal is likely to be revisited as the government is looking to revise or replace EPC’s so the landlords who are taking more action now, will be futureproofing their assets as once the system includes operational efficiency, much, more investment will be required.

This is in line with the industry demands as more businesses have ESG and green targets which will be impacted by their choice of office, especially as occupiers are now more aware of the improved running costs of an energy-efficient building.

Sustainability is such a huge value driver in the property market and EPC regulations mean that sustainability drivers are factored into landlords' and occupiers' pricing. The most recent UK energy white paper proposed that a minimum epc rating of C will be in place by 2027, which will increase to B by 2030! This will be extremely difficult to achieve for a lot of legacy assets so with fines set to increase, it makes sense to act now to improve your building's energy efficiency.

For more details on how to make your buildings more energy efficient, get in touch and we will be happy to advise you on the various initiatives and sustainable changes you could make to your properties.

Harris Associates are an award-winning RICS building and project consultancy providing advisory, and project-led services at every stage of a building's life cycle, across commercial and residential sectors.
They specialise in Building Surveying, Project Management, Landlord/Tenant issues, and Cost Management and are one of the premier providers of façade and cladding assessment and remediation throughout the UK.


For more information, assistance, or advice please get in touch with Shaun Harris or Richard Stone or call 0203 195 0857 or 0161 615 3679.