How “clean growth” affects buy-to-let and commercial landlords

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Last October, the government outlined 50 proposed ls

that will contribute to what is called “clean growth.” Some of these policies affect landlords of commercial and residential property.

Part of the reason for “clean growth” is to reduce UK carbon emissions so that their effect on climate change is diminished. The government is proposing raising the minimum energy efficiency standards (MESS) for rented commercial buildings. Buildings are currently rated from level G to level A. From April 1st, 2018 any commercial property with an energy rating of F or lower may not be re-let until energy efficiency alterations have been carried out to bring their MESS to a minimum of level E. In the future, this could be raised further to at least level D. This means that landlords with buildings rated F or G should consider raising their standards to D or higher in anticipation of any changes by the government.

The government has said that it is considering looking at raising rented residential property energy level requirements to at least level C, perhaps by gradually increasing the requirements to level C up until 2035.

Landlords could find it difficult to obtain a commercial mortgage for either commercial or buy to let properties that have low energy ratings. Loan offers could be conditional on landlords carrying out the required work to increase the energy rating.

In the government’s quest to tackle climate change, improving the energy efficiency rating of rented buildings is one way to reduce carbon emissions.

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