Bryony Ireland by

Posted on April 5, 2017

We are all aware of the issues around global warming and the need to reduce energy consumption. The Energy Act 2011 contained a number of provisions. One of the most significant of these will impact both the private rented sector and the commercial property market in just one year’s time.

Energy Performance Certificates (EPCs) have now been in place for some time and have provided information on the energy efficiency (or not) of both residential and commercial properties.  However, with effect from 1st April 2018, it will become unlawful to let space with an energy efficiency rating of F or G (the two lowest grades of energy efficiency).  The regulations will apply not only to new tenancies – but to the extension or renewal of existing leases.

Considered opinion within the property market estimates that almost 20% of lettable space currently falls within grades F and G with an estimated 14% falling into category E.

Landlords with property falling into these categories are likely to see the value of their investments fall significantly unless they take measures to improve the energy efficiency rating of the affected space.

There has been much debate recently regarding the energy efficiency of solid walls and whether this may have been previously underestimated.  Following further research the Government may re-calibrate the requirements which would bring some properties in the F and G categories out of the danger zone.   As this has not yet been determined, landlords should not rely on this eventuality. Landlords would be well advised to read the regulations in order to fully understand the various requirements and restrictions which will soon apply.

The clock is ticking!