In 5 years, 17% of the UK’s investment real estate may be unable to be rented out under new EPC regulations (Energy Performance Certificates). Provisions in the Energy Act make it mandatory for commercial properties with an EPC lower than E to be brought up to standard before they can be let. EPCs are benchmarked by Building Regulations , which are continually updated and revised so even ‘safe’ ratings such as E and D may not meet the standards required in 2018.
London looks to be marginally better than the national average with 14% of commercial property required to be improved – rising to 35% if E-rated buildings are included. Although the regulations will not come into force until 2018 there is a significant threat to commercial property owners loosing income if they are not aware of and don’t respond to these changes. Buyers are already beginning to invest in D-rated assets or above.
Upgrading to energy-efficient lighting like LED will have the biggest effect on ratings, furthermore the rules, conventional and quality assurance were less developed than they are today and many older EPCs do not accurately reflect the condition of the building.