Landlords need to make their properties energy efficient

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From April 2018, owners of energy inefficient commercial buildings that want to rent them out will face restrictions, reported in March 2017.

Over 10 years ago, regulations made it compulsory for all buildings to have Energy Performance Certificates, which rate the energy efficiency of a building on a scale from A to G, with A being the top rated for energy efficiency. From April 2018, any building that has the lowest grades of F or G will not be allowed to find new tenants or renew existing tenancies. Commercial buildings with existing tenants have until 2023 to be rated better than F, and landlords of residential buildings have until 2020 to comply.

The government has published figures that show that about 20% of commercial buildings are rated F or G.

Landlords calculating their costs when buying property that is energy rated F or G need to factor in the expense of upgrading the energy efficiency of the building, as well as all the fees and interest charges on a commercial mortgage used to finance the purchase.

Richard Lambert of The National Landlords Association said that many landlords are unaware of the need to upgrade their buildings, explaining:

There are some exemptions for listed buildings and situations where the cost of improvements exceed the energy cost savings over seven years. These exemptions have to be applied for and approved by the government’s business department.

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