As of April 1st, over 19,000 commercial properties in the UK may be deemed unfit for occupation due to the implementation of stricter energy performance regulations, according to data from property insight firm Search Acumen.
The Minimum Energy Efficiency Standard (MEES), introduced in 2018, mandates that Energy Performance Certificates (EPCs) must be rated E or above, which now applies to both new and existing leases.
Search Acumen’s research, based on government-registered EPCs, indicates that 19,166 commercial properties currently have EPC ratings of F or G, below the required minimum.
These properties, including offices, shops, hotels, libraries, museums, and healthcare facilities, must undergo immediate upgrades to achieve an EPC rating of E or above in order to continue leasing.
Offices and retail properties account for the majority of F and G-rated EPCs, with 8,139 and 6,600 properties, respectively.
The analysis also reveals that 32 libraries, museums, or art galleries, 26 hotels, 219 day care or community centers, and 14 hospitals and care homes fall below minimum standards.
Local authorities with the highest and lowest number of F and G-rated leased properties include Westminster (488), Birmingham (334), Nottingham (294), Isles of Scilly, Cornwall (1), Castle Point, Essex (5), and Gosport, Hampshire (7).
In contrast, only 2,438 properties hold the highest EPC ratings of A and A plus.
Andy Sommerville, director at Search Acumen, said:
“Tightening regulation around energy performance is an essential part of decarbonising our built environment however, inevitably, many commercial landlords will have been caught off guard. Many property owners will need to scramble to retrofit properties and, at a time when purse strings are tight, this may cause some issues.
“However, investment now in high levels of sustainability is essential for future proofing commercial portfolios and ensuring compliance with stricter regulation but also better meeting the needs of occupiers who are more focussed than ever on lowering their carbon footprint and their energy costs.
“We know time is of the essence while companies look to urgently address the changes made to the regulations. Search Acumen is here to make the job of property lawyer who is tasked with navigating this period of change, more time and cost-efficient, via digitalisation of the conveyancing process.”
