According to the findings, just 9% of commercial landlords have an EPC rating of E or above for all of their properties
As many as 39% of commercial landlords are unaware of Energy Performance Certificate changes coming in to force next April, highlighting confusion in the market and the need for longer-term planning, according to new research from Handelsbanken.
According to the findings, just 9% of commercial landlords have an EPC rating of E or above for all of their properties – new legislation from April next year means all commercially rented properties in England and Wales will need an EPC rating of at least E in order to continue being let.
Currently, an EPC rating of at least E is a legal requirement for commercial properties before they can receive a new or renewal lease and this is being extended to both new and existing commercial leases next year.
16% of commercial landlords surveyed said they are planning to sell their properties as they find the new EPC requirements too daunting, primarily as they cannot afford to make the requisite changes. That leaves 74% who need to upgrade their portfolios.
Many landlords are taking steps to upgrade their properties, with 42% of respondents planning to install insulation, while 36% will invest in an energy-efficient boiler, and 35% say they will buy newer properties instead of older, less energy-efficient properties. 30% will fit double-glazing.
However, there is still uncertainty in the market on how to implement changes. The main reasons given among those without a plan were that regulation makes it too difficult to do so (42%), a lack of knowledge about what changes to make (38%), and not believing that they can access the right finance (14%).
Richard Winder, UK Head of Sustainability at Handelsbanken, comments: It is worrying that so many landlords declared themselves unaware of the April 2023 deadline, though there are signs many are taking action, for example by investing in double glazing and extra insulation.
Although money is getting tighter right now, the rise in fuel costs and further planned hikes in energy efficiency standards make carbon-reducing measures a smart investment for landlords and tenants alike, he said.
He said: Landlords will want to start by consulting their existing Energy Performance Certificates, to find the most cost-effective route to a higher energy-efficiency rating.
