The British Property Federation (BPF) have published research finding that government inaction could lead to a majority of buildings in cities being unlettable
To date, 81% of commercial buildings in major English cities are below a B rating in EPC regulations.
They argue that this could lead to these buildings becoming illegal to let out unless clarity is given.
Investment and upgrades to building stock is slow
The BPF says that, while progress is being made, it is too slow, and this is due to government inaction following the 2021 consultation on minimum energy efficiency standards.
The consultation originally sought views on targeting an EPC rating of C by 2027, and of B by 2030, and it was expected that the government would respond to this in the publication of the Warm Homes Plan. This has not been the case, and the industry now sees these targets as unrealistic.
If 81% of commercial building stock in major cities continues to stay below that B level, this will equate to 190m sq. m of commercial real estate out of use.
The research that found this was conducted across all asset classes in London, Birmingham, Bristol, Leeds, Liverpool, Manchester, and Newcastle-upon-Tyne.
Furthermore, the research also found that just 3% of these buildings have an EPC rating of A, and 16% have a rating of B.
Lack of clarity “is beyond belief”
Rob Wall, assistant director of the British Property Federation, said: “The Warm Homes Plan has left commercial landlords in the dark and out in the cold. We have been waiting for five years for a decision on future minimum energy efficiency standards for the non-domestic private rented sector. It is beyond belief that ministers have kicked the can down the road once again.
“Our latest research shows some improvement in the EPC ratings of commercial buildings and this reflects what we see in the market, certainly when it comes to new buildings. However, the lack of any real policy development under this Government on upgrading commercial property is leaving commercial tenants with higher energy bills and undermining efforts to decarbonise our buildings.
“Many in the industry support higher minimum standards but progress will remain slow as long as Ministers continue to duck decisions. Clarity on future standards is critical to increasing demand, attracting investment and building green skills and supply chains.”
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