Act now to improve energy ratings, says Lambert Smith Hampton
As you tuck into the mulled wine and mince pies, consider this reminder on energy efficiency from Lambert Smith Hampton. The firm is warning owners of properties with poor energy ratings that they should act promptly to improve them, or risk being left with an unlettable building.
Under the Energy Act 2011, it will become unlawful to let buildings that have Energy Performance Certificates rated F or G after April 2018. Government figures suggest that up to 18% of properties with an Energy Performance Certificate fall into these two categories.
While 2018 may seem a long way off, LSH says the effect of an F or G rating on a building’s value will be felt much sooner. LSH associate director Adam Ramshaw says the legislation “is likely to have a significant impact on the marketability and value of investment stock over the next five years and beyond.” He points out that the extra expense is bound to have an effect on the market, especially for secondary stock “where we are already seeing the effect of physical obsolescence on pricing and marketability”.
LSH points out that investors in buildings rated F or G could face significant improvement costs to mitigate the “potentially disastrous” falls in value of such older properties. It says investors should act now to understand the reasons for a property’s poor rating and establish the cost and affordability of improving matters in order to achieve a higher rating. The liability for such measures could lie with the landlord or with the tenant, depending on the terms of the lease involved.
Landlords of buildings with D and E ratings should not be complacent, Ramshaw adds. “While F and G rated properties will suffer the first sanctions, falling values will affect other buildings too over time as regulations get more stringent. Investors and landlords should act now to secure the highest possible energy rating.”
