After an incriminatory report last year revealed that buildings in London have some of the lowest energy efficiency ratings in Europe, the Government has set strict new guidelines for landlords in the Capital.
From April 2018, all properties in London, whether commercial or domestic will be required to improve their energy efficiency rating to at least an E on the Energy Performance Certificate Scale. The importance of having an EPC is now higher than ever.
The report, which was conducted by the Association for Conservation of Energy, revealed that 37% of non-domestic buildings in the Capital were given a Grade E or lower, with over 18,000 rated F or G – the lowest possible rating for a property in the country.
It was also revealed in the report that over 25% of residential properties in London (around 830,000) have an energy efficiency rating of E, F or G.
The Research Director of the Association for the Conservation of Energy admitted that he and his team were very “shocked” at the results;
“…a quarter of London’s homes and 37% of its workplaces have the very worst energy ratings and therefore waste a large proportion of their energy. Millions of the capital’s homes and businesses still stand to gain from energy efficiency upgrades. If our shops cut energy costs by 20%, it would be the equivalent of a 5% increase in sales.”
An Energy Performance Certificate, or EPC, is essentially a document rating the energy efficiency of a property. An assessor will visit a property and evaluate a number of factors regarding how “energy efficient” the building is. He will then give the property a rating from A-G based on its efficiency (A being the highest rating, G the lowest).
Since August 2007, an EPC is a legal requirement for all properties, both commercial and residential. However, due to the aforementioned report regarding the extremely low efficiency ratings of London’s buildings, the government have taken matters into their own hands.
If a property does not have an efficiency rating of E or higher by April 2018, the landlord will not be able to bring in new tenants and/or reach any kind of leasing agreements until specific changes have been made and their rating has improved.
However, with the sheer number of buildings that require improvements in energy efficiency, experts are warning that the majority of properties will be left without tenants from April 2018. In fact, those in the industry believe that all buildings requiring energy upgrades won’t be ready until 2025.
You might also be interested in reading our most recent article about 5 Things to Know About EPC For Commercial Properties In London.