New EPC targets to be missed by fifth of commercial landlords

Nearly a fifth of UK commercial landlords still have properties with an energy performance certificate rating of F or G, despite new legislation con April 1 demanding they have a minimum E.

Following the April 1 change the government has further ambitions to make it unlawful to let commercial property below an EPC B rating by 2030. 

Research by audit, tax and consulting firm RSM UK also shows that 52 per cent of landlords do not think these timelines are achievable for the majority of commercial property owners. However, just over a third of respondents believed the timelines to be achievable, while 12 per cent remained unsure on the outcome.

More positively, some 30 per cent of respondents slightly or strongly disagreed that the UK’s real estate sector is making quick enough progress to reduce its carbon footprint in line with the UK government’s net zero targets, down from 39 per cent the previous year. 

Similarly, 41 per cent of businesses surveyed slightly or strongly agreed that enough was being done, a slight increase on the previous year.

Stacy Eden, partner and head of real estate at RSM, says: “As the UK works towards its net zero targets, the real estate industry is at the forefront of driving this change by developing and adopting new green solutions to improve the energy efficiency of commercial property in the rental market. 

“However, as an energy-intensive sector, this is a challenging period as a result of inflation and the energy crisis. Our Real Estate 360 survey highlights the real challenges landlords are currently facing, with the focus on the ESG agenda both presenting an opportunity to innovate as well as barriers to overcome.

“Although it is encouraging to see landlords respond well to the government’s approach on environmental solutions so far, there remains real concerns, especially with landlord willpower being the biggest barriers to decarbonisation. More worryingly, almost one fifth of landlords own commercial property which will be deemed unlawful to let as of April 2023, which has further implications for landlords and their income streams. With further EPC legislation expected to arrive by 2030, government support is needed, or we could start to see a black hole in the rental market.”

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