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EPC Ratings for Commercial Buildings – What's Changing?

EPC Ratings for Commercial Buildings – What's Changing?
23 March 2022 | Updated 29 March 2022
 

New research has revealed that thousands of commercial properties across the UK won’t meet new energy efficiency regulations, incurring fines for landlords, and potentially disrupting businesses.

 

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What Should Commercial Landlords be Aware of When it Comes to EPC Ratings?

 

From April 2023, an extension of the MEES regulation will prohibit landlords from leasing out commercial buildings with an EPC rating of F or lower.

Researchers at Bensons Gas Engineering have analysed the EPC ratings of rented non-domestic properties in the UK and how leased property energy efficiency compares to the standard ratings across the UK non-domestic market.

MEES, or Minimum Energy Efficiency Standards, are minimum requirements for EPC ratings enforced by the government. These regulations are being extended in April 2023. 

From April 2023, UK landlords will not be able to grant or renew a policy for a tenant if their commercial property has an EPC (Energy Performance Certificate) rating of F or lower. Fines for continuing to let a property from this date will amount to a minimum of £5,000, up to £150,000.

In order to improve the EPC rating of a commercial building the landlord must have work carried out to increase the property’s energy efficiency, such as replacing the boiler or insulating the property.

Tenants may be asked to leave the property whilst work is being carried out to improve energy efficiency. They may also be asked to contribute towards the cost of the works. 

 

Theatres and Cinemas Least Likely to Meet MEES Regulations

 

The research found that theatres, music halls and cinemas across the UK are the non-domestic leased properties that were least likely to meet the new MEES regulations, with 47.2 per cent having an EPC rating of F or G. 

Libraries and museums follow with 37 per cent having an EPC rating of F or G. 

Among the best insulted and energy-efficient commercial buildings are hotels with only 2.9 per cent having an EPC rating of F or below and passenger terminals with 3.1 per cent having an EPC rating of F or G. 

The research revealed that landlords are offloading properties not meeting MEES, with 13.3 per cent of commercial properties for sale having an EPC rating of F or G.

10.13 per cent of commercial properties currently leased out do not have an adequate EPC rating of E or above, so it’s important for tenants to check the history of a building to prevent your business being evicted or disrupted when the new law comes into place in April 2023. 

 

Westminster Has Highest Number of Properties Failing EPC Requirements

 

Richmondshire has the highest number of properties (19.7 per cent) with an EPC rating of F or G. Commercial buildings in this area tend to be less insulated and therefore less energy efficient. 

Buckinghamshire has the lowest number of properties with an EPC rating of F or G, at just 1.9 per cent.

Westminster has the highest number of properties that fail to meet the new EPC E requirement, with 831 commercial properties out of 6,946 in the area (12 per cent) receiving an F or G rating.

When looking for a new property to purchase or rent, you should look for a commercial building with at least an EPC rating of E or above. Purchasing or renting a property with a lower EPC rating than E, could lead to difficulties when the new UK law is enforced in April 2023. 

 

Improving the EPC Rating of Your Commercial Property

 

Improving the EPC rating of your commercial property will be essential from April 2023. You can do this by:

 

  • Replacing the boiler. Opting for a new energy-efficient boiler can cut down energy bills and reduce the building’s EPC rating.
  • Installing double glazing. Upgrading your windows and doors to double glazing can improve your EPC rating and reduce noise. 
  • Installing wall insulation. Insulating your walls can reduce your EPC rating significantly, making sure no energy is lost. 
  • Installing a renewable energy source. Installing solar panels can improve your EPC rating and provide you with cheaper, greener energy. 

 

The energy efficiency assessor providing the EPC rating will suggest the most effective improvements that can be made. 

Picture: a photograph of a house outline and A-G ratings, indicating EPC ratings for a house image Credit: mattiagenini via Adobe Stock

Article written by Ella Tansley | Published 23 March 2022

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