Minimum Energy Performance Standards

04 Mar 2016

Hurst Warne

From 1st April 2018 the government Minimum Energy Performance Standards (MEPS) will come into action.

This means that properties that fail to achieve an EPC rating or E or higher will legally not be allowed to be rented or sold. Consequently any landlords of properties with an EPC rating of F and G will need to make the necessary investment into energy efficient technologies if they wish to continue to rent out their premises. These new government standards are anticipated to effect approximately 25% of the total amount of properties registered with an EPC rating.

Although over the years we have seen a significant increase in the amount of energy efficient and green buildings in the commercial sector, there is still plenty of room for improvement. Commercial buildings contribute to 10% of the UKs total greenhouse gas emissions, this high percentage only highlights the necessity for change and the importance of schemes such as MEPS for integrating energy efficiency and sustainable development further into the commercial property market. The government hopes that by enforcing MEPS landlords will be obligated to make small changes that will have a larger impact on the UKs greenhouse gas emissions to help meet with their 2050 goals of reducing emissions by 80%.

Although energy certificates such as EPCs and MEPS are obligatory they bring benefits to landlords. Buildings with higher EPC ratings (typically between A-C) have been found to achieve rental premiums and have lower vacancy rates as well as experiencing slower deprecation as they are more desirable to tenants due to reduced energy bills and falling in line with many firms corporate sustainability strategies.

What should a landlord do?

  • If you do not already hold an EPC rating, you will need to obtain one.
  • If your EPC rating is F or G, look into the necessary energy efficient technologies that would best suit your premises and be the most financially beneficial in the long run.
  • Take advantage of void periods and lease breaks to make improvements.
  • Ensure all the improvements to your property have been implemented by the April 2018 to avoid any penalties.

Examples of energy efficient technologies to help rise EPC ratings:

  • Insulation
  • Double glazing
  • Solar panels
  • Wind turbines
  • Energy efficient lighting
  • Rain water harvesting
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