Energy Performance Certificate
As an energy assessor I get to inspect a large number of properties, most of which are vacant and looking to be sold or let. Consequently it is in the vendors (or Landlords) interest to ‘make the most’ of the property. Historically this has taken the form of ensuring units are cleared out, kept secure and generally ‘tarted up’ where required. If you were selling your house you would follow a similar regime to assist the sale.
There is however now another major factor that vendors and Landlords now need to consider as part of their marketing preparation, the EPC (or energy performance certificate). All commercial properties now need one if they are to be sold or let, so why don’t people take getting the best rating they can seriously?
This week I have prepared an EPC on a period office building (in Derby), nothing unusual there. But, a high proportion of the bulbs were old style tungstens (the type favoured by Daily Mail readers). As part of my report back to the client I highlighted that changing these all to CFL’s (compact fluorescents) would make a massive difference to the rating which as it stood would be an ‘F’.
This being most important due to the changes due in 2018 which would make this property unmarketable if it remained as an ‘F’. This is something that all Landlords need to consider as part of their property portfolio reviews moving forwards.
On this property the change was quite remarkable – for the cost of around 20 CFL’s (£20?) the rating moved from an ‘F’ to a ‘D’! So as far as this client is concerned the bulb change will be done, the EPC updated to a ‘D’ and the properties long term future secured.
So, in a nutshell, before you get your property assessed give some thought to the simple items you can alter like bulbs and fluorescent tubes – it may save you a lot more than just electricity in the long-term!
Some while ago I blogged about how the rules for the provision of energy performance certificates on commercial property were planned to be changed – but kept being delayed. Well finally the new rules are coming into force – from the 6th April 2012.
That is obviously good news for me as an energy assessor, but it will I hope also make people on both sides of property transactions far more aware of the effect of the energy efficiency of their properties on business generally.
At a business lunch I attended this week I was discussing ‘green buildings’ with a couple of banking clients. They still have to see this having any effect upon their lending – either from a security point of view or value stand point. What they are very aware of though is the long-term potential that the energy legislation may have on their security – the proposal that all F & G rated properties will become un marketable from 2018 is already on their radar. The ‘official line’ they have been told by the powers above is that the Government are unlikely to miss their proposed changes in legislation.
This highlights one of my pet hates – lazy landlords – get the easy things done to your properties in terms of ‘greening’ them before marketing. Things like low energy lighting, insulation and replacing old inefficient heating systems. It can make a huge difference to you epc rating.
You have been warned!
As a profession we have a vested interest in environmental matters, whether or not ‘green buildings’ are capable of attracting higher values is up for debate (see my colleague Tim Garratt’s recent research). But, one thing we can do is ensure purchasers and tenants of commercial property at least have an idea of how energy-efficient their buildings are. Enter the Energy Performance Certificate (EPC), one of our industries most maligned pieces of paper!
The residential market has been more EPC savvy than the commercial world for a while, the law has required all residential agents details to have the EPC graph displayed (and consequently the public have come accustomed to it). The Government however in their infinite wisdom decided that the commercial property market wasn’t ready for this level of enforcement (despite it being far smaller than the residential market) and consequently the requirements for EPC’s on Commercial property were ‘wishy washy’ at best, and easy to ignore at worst.
The upshot of this was that EPC’s are not generally prepared before marketing (which they should be) and tend to be prepared just as the property is in lawyers hands – once the deal has been agreed. Consequently the property decision has been taken without any view to the energy efficiency of the building – no wonder green buildings currently show no premium value over ‘ordinary’ buildings!
However, finally last year the Government announced their proposals to bring the Commercial Property world in line with the Residential market – through their proposals for the amendments to the Energy Performance of Buildings (Certificates and inspections) (England and Wales) Regulations 2007 – otherwise known as the EPD regulations.
But, (and there is always a ‘but’), the regulations were supposed to come into force in June 2011, but they were delayed until October 2011 – and now we are being told that they will be delayed until April 2012! We were only told this on Friday by the CLG, so most agents are already in the process of preparing for the changes, so why the delay of almost 12 months in total?
No one really knows, according to the CLG the proposals are still the same as they were at the start. What is clear is that the current situation will prevail until Easter 2012 at which point there will probably be a mad rush to comply by agents who no doubt currently feel ‘relieved’ that they don’t have to get their EPC’s quite yet!
I am still hoping that my work load on EPC’s (I am an assessor) will increase over the next 6 months as people get ready for the change (assuming it is not delayed again), but I am not holding my breath!
So thanks CLG for again being a great help on this!
As an energy assessor I have been waiting for the Government to begin the task of making use of the database of property efficiencies that they have been building up through the introduction of energy performance certificates on both residential and commercial properties. Well it appears that the first move is being made now.
Energy secretary Chris Huhne has announced plans to introduce regulations to ensure rented properties meet minimum energy efficiency standards under the green deal. The following changes are proposed;
- From April 2016 landlords will not be able to refuse reasonable requests from tenants, or local authorities acting on behalf of tenants, to improve their property.
- From April 2018 the government will make it unlawful to rent out a house or business premises which has less than an E energy efficiency rating (Energy ratings of F and G will effectively be outlawed in rental properties from 2018).
Now this is a long way in the future and may well (almost certainly) change before it is adopted, but current estimates suggest that this proposal would involve the improvement of at least 682,000 properties across the UK. Previous suggestions were that energy ratings could be used to vary the business rates payable – a poor rating being hit harder in money terms – this may still come, but this proposal has a similar effect.
This is the Governments first attempt to force those landlords who don’t take up the green deal to improve their properties – in my view it is to be applauded, but I am sure most Landlords won’t see it that way!
As a qualified energy assessor I have a vested interest in the enforcement of the law in relation to the provision of Energy Performance Certificates (EPC’s) on commercial properties. To be honest they are viewed by the market as a pain and something that has to be provided but only under sufferance!
Currently, only owners bear the responsibility for commercial EPCs, with agents carrying no responsibility, other than to inform owners that one is required (which they do to cover themselves). But owners only tend to provide them as and when a deal is agreed – not really within the law and not helpful in getting EPC’s properly adopted! Or providing me with work!
However, help is at hand! The CLG (Communities and Local Government) are finally proposing that from July 2011 agents will become responsible for both domestic and commercial EPCs (they are already responsible on residential properties).
Under the terms of this new proposal, agents will finally become responsible for commercial property EPC’s and will be required to meet the regulatory and compliance standards as set out in the current legislation (Energy Performance of Buildings Directive 2002). This means that the certificate should be available at the point of marketing the property. The requirement for an upfront EPC is in anticipation of the recast EPBD which will introduce EPC ratings with adverts in 2013 (if not before).
My institute the RICS (under whom I qualified as an assessor) are apparently in discussions with both the CLG and DECC to “ensure that practical steps are taken to ensure that agents are in a position to provide this information”.
I am not sure what the ‘issue’ is – all agents have to do is comply with the law as it stands at the moment and they will not even notice the change!
This week the UK Green Building Council have announced that they have had a ‘good idea’ – they think we should develop another form of energy rating – in addition to the Display Energy Certificate (DEC) that is displayed in public Buildings and the Energy Performance Certificate (EPC) that is required for sales and lettings on commercial buildings. They propose that a Landlord Energy Statement (LES) should be displayed in all commercial properties to show to the occupier and market as a whole just how efficient that building is.
Well no. I have to agree with my management colleague Tim Garratt, we do not need another form of energy certificate to do this. What needs to happen is for the existing form of EPC to be properly adopted by the market – in other words the EPC for commercial property needs giving teeth!
If we look at the residential market the level of exposure to EPC’s for residential property is now gaining critical mass – as high as 80% if some sources are to be believed. This enables comparisons to be made if as a purchaser you want to. “If'” being the point – at the moment there is no real reason to want an ‘A’ rated property over a ‘C’ – but at least the comparison can be made.
If agents were required to have EPC data on their sales details (as the residential agents do) that would start to push the data into the public domain – and allow comparison.
The problem as I see it is that the public have to WANT the information – and to do that the Government need to brandish a stick – possibly relating to a rates benefit for better rated properties. But, until they do the EPC will remain a hoop that needs to be jumped through rather than something that can actually help a landlord or tenant.
Time for the coalition to act!