The perception this year has been that we are all much busier in the commercial property world – this is a relative concept, things are still tough, but the ‘Property Transaction Statistics’ from the HMRC that I came across last week do appear to support that there has been a slight increase in transaction numbers across the UK property market as a whole during the last 12 months.
This first chart indicates activity over the last 8 years in the residential and commercial property market. It shows a definite upturn this year.
The second chart shows just the commercial market – a much less obvious increase in growth – but still apparent.
As some of you who regularly read this blog may be aware, as an energy assessor I was trained by the RICS who are my professional institution. I subsequently lodged all my energy assessments under the RICS accreditation scheme – that is until they gave all their assessors one months notice of the closure of their scheme.
Well that month has now ended and I have transferred to another accreditation scheme, the transfer has been painless, but sadly that had nothing to do with the RICS who have been spectacularly absent throughout the entire episode.
At the outset I had to chase the RICS for confirmation of the scheme closure – not an auspicious start. Since then I have had one notification of a possible new scheme to join (CIBSE) from them and nothing else – no check to see if I had managed to arrange anything – nothing!
On Friday it also transpired that the scheme actually ended at 4pm – not midnight – so part way through the afternoon I found I couldn’t lodge any EPC’s – great! There was a note on the login page – but no one actually would login that way!
However, Lifespan who I use to lodge my assessments were brilliant and helped me out, also my new accreditation body – sterling – were very helpful and efficient. even CIBSE rang to check I was sorted – but not my professional body.
In an age when as Chartered Surveyors we are being asked to comply with more and more rules and regulations by the RICS it’s nice to see that they have our best interests at heart!
I am a Chartered Surveyor – and proud of it. My membership of the RICS allows me to do my job and satisfy my clients that I have the necessary knowledge and qualifications to do it properly. So why does the RICS make it so difficult for me to consider them my ‘friend’ in business?
Let me explain – a few years ago I undertook the RICS accredited Energy Assessors course to qualify as an RICS accredited energy assessor – this would allow me to prepare EPC’s for my firm and clients and then lodge them. The training was quite intensive and not cheap, but I was proud to be accredited by the RICS as they were considered to be one of the better managed schemes – so perhaps of a better quality?
So all looks rosy – until Friday when I gathered (second hand) that the RICS are going to withdraw their accreditation scheme – so I will have to register with another body. This will possibly entail doing further exams – despite being qualified already, and more importantly if I don’t act quickly, might cause a break in me being able to provide the service.
I picked the information up from an RICS forum, from other equally confused assessors. I have subsequently spoken to the RICS by telephone and they have confirmed the news, and told me the letters are in the ‘process of going out’ – have they not heard of email? I have however been told officially by the software provider I use for EPC calculations and lodgment (Lifespan) and have also received an email from an alternative accreditation scheme (Elmhurst Energy) offering a free transfer.
So why if they can all contact me so quickly and efficiently, cant the RICS (who are supposed to look after my interests for me?)
Oh, and the notice that the RICS has given its members? Five weeks (and that is for the ones that have heard officially – I still haven’t). So am I to believe that this decision was only taken a few days ago – I think not!
Now do you see my issue with the RICS?
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!
This is a ‘hobby horse’ of mine, as an energy assessor I am regularly the subject of my colleagues jibes about EPC’s and how they are pointless and just get in the way of doing deals. My response has always been ‘wait, they will become relevant. So get them sorted now’
The changes requiring agents to have an EPC before marketing a commercial property have made them consider them more in the past few months – and strangely has made me busier! However there is another bit of legislation due to take effect from April 2018 which will potentially have a far greater impact and is only just being taken note of by the property world;
• The Energy Act 2011 was given Royal Assent on 18 October last year
• From 18 April 2018, it will be unlawful to let any property that fails to meet a minimum energy rating
What is not clear is exactly what the minimum rating will be, it is being speculated that the minimum will be an ‘E’. This would make all ‘F’ and ‘G’ rated properties unlettable!
As a practice we have been advising our clients to be aware of this for a while, but I have recently experienced its effect for the first time from one of the main lenders – a bank taking a charge over a development of six modern units that were built prior to the requirements for EPC’s on new builds. They had no legal responsibility for getting EPC’s on the units – but it was made a condition of the loan that they were provided.
What should you do / how might it affect you?
- This could have very significant implications for landlords, and for occupiers who wish to assign or sublet space.
- Marketability of some properties would become impossible unless they were upgraded to meet the minimum standards. It is estimated that approximately 20% of non-domestic properties could be in the F & G rating brackets.
- Further clarification on the transactional trigger for minimum energy standards is awaited; however the new minimum standards could apply to all lettings and re-lettings, including sub-lettings & assignments.
- Valuations of such properties could be affected if their marketability is diminished.
- Rent reviews for properties in this situation could also be affected.
- Implications for dilapidations assessments would also exist.
Food for thought, perhaps it is time to get your properties assessed so that you can be sure that they have a long term marketability?