Award Winning
commercial property solutions
Prop-search commercial property


Commercial landlords left in EPC limbo

Commercial landlords have been left in limbo following the Prime Minister’s speech last month, says commercial property agent Prop-Search, wondering if key changes to environmental targets will affect them.

In his speech, Rishi Sunak scrapped targets which would have seen residential landlords required to bring their properties up to an EPC rating of ‘C’ or higher by 2025 for new tenancies and for all existing tenancies by 2028. 

But is the same coming for commercial premises?

Currently, all tenanted non-domestic properties with existing leases cannot continue to be let with an EPC rating of ‘F" or "G’.  However, a Government consultation in 2021 proposed a minimum rating of C or above by 2027, and B or above by 2030.  It was also thought that owner occupied commercial property would face a similar trajectory.

Samantha Jones, an Associate Director of Prop-Search, said: “Despite this consultation ending over two years ago, the Government has still not published the response or clarified what standards commercial landlords must meet.”

It was hotly anticipated that the minimum energy efficiency standard for commercial premises would be raised in the near future, if the Government remains committed to the Net Zero target in 2050.  However, the recent announcement that the Government will no longer require homeowners and landlords to meet energy efficiency targets by making 'expensive insulation upgrades" leaves the likely targets for commercial properties in doubt.

Samantha added: “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.”

“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 (55%) 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 encourage investors to look beyond the next compliance hurdle towards the broader sustainability transition underway, and to consider the efficiencies and opportunities that might be created by taking a long-term, strategic approach.”


Wednesday, October 25, 2023