Out-Law News 1 min. read
06 Mar 2012, 3:48 pm
The BPF said that the property industry needed further clarification on exactly when it would be illegal to let out commercial premises that have an eEnergy Performance Certificate (EPC) rating of F- or G-.
“The property industry is doing a great deal despite the economic downturn to put its house in order. But it needs clarity from Government as to exactly when F- and G-rated properties will be unlettable and a clear roadmap going forward," said Liz Peace, chief executive of the BPF. "The economic woes have made things difficult but sustainability as an issue isn’t going away."
A BPF statement said that it is estimated that 600,000 UK properties have an F- or G- rating and would be affected by the law change. This represents 18% of commercial properties in the UK, it said.
Property law expert Siobhan Cross of Pinsent Masons, the law firm behind Out-Law.com, said that it is likely that environmental characteristics will begin to have an impact on property valuations.
"Increasingly it may become important for property investors to attribute more importance to EPC ratings on acquisition decisions and to consider disposals of low EPC grade property which might be difficult or expensive to upgrade," said Cross. "Whilst we are currently looking at restrictions biting in 2018 on F and G grade properties, the possibility that this benchmark could increase to higher EPC ratings in future years cannot be ruled out as the UK strives to meet its carbon reduction targets."
The Energy Act 2011 contains powers for the Secretary of State to introduce new regulations to establish the new regime no later than 1 April 2018.
Property and environmental law expert Linda Fletcher of Pinsent Masons said that the restriction on landlords letting properties with low EPC ratings is subject to there being an available a scheme in place, such as the Green Deal, to finance the required improvements.
"This is all part of the Government's strategy to meet the Climate Change Act targets in reduction of emissions. It is widely acknowledged that the biggest challenge lies with the existing building stock in the UK," said Fletcher. "To date the EPC system and various incentives have not led to the emission reductions that are required to ensure the UK is on the right trajectory to achieve these targets."
