Housing efficiency guidance released in run-up to new regulations

Real estate software provider Arbnco has released a guidance report for commercial real estate (CRE) investors and landlords to help achieve MEES compliance.

The Minimum Energy Efficiency Standards will require properties to achieve a minimum ‘E’ rating and will apply to new leases and renewals from April 2018.

Research produced by Arbnco (formerly known as CO2 Estates) has found that the estimated 19% of properties not complying could see their capital value reduced by as much as 10 per cent with the impact on the total UK value estimated to be as much as £16.54bn.

The paper contains a five-step plan to achieving MEES compliance, which includes identifying properties with no EPC, review lease renewal dates and decide whether a new EPC is required, along with confirming that ‘at risk’ properties in the F and G brackets are really F and G by undertaking new EPCs, in order to provide accurate and dependable ratings before undertaking any retrofit works.

The research also emphasises the need to identify means of retrofitting ‘at risk’ properties to achieve an E rating or better and assess the cost of compliance, as well as reviewing the impacts of future refurbishments and planned preventative maintenance (PPM) schedules.

The need to incorporate energy efficiency improvements into retrofit and PPM schedules and update leases, tenant fit-out and dilapidations processes to allow for appropriate provisions for the landlord/owner to continue to comply with the requirements of MEES is also suggested in the study.

Pauline White, underwriting analyst at Zurich believes action now to identify at risk properties and the costs to improve them will be time and money well spent.

“Without this, the owner could end up with a property that cannot be let, potentially long term unoccupied that becomes a drain on resources instead of generating an income,” she said.

Simon West, founder of Arbnco, added: “All landlords will potentially be affected by the MEES regulations, irrespective of the size and nature of portfolios and early action is advised to mitigate the impact.  Landlords and CRE investors need to acting now to alleviate the risks posed by MEES legislation ahead of the April 2018 start date.”

Arbnco will launch its Arbn Consult software platform to the consultant and EPC Assessor market from April 2017.  It enables quicker and better decisions to be made on the energy performance of commercial property.  The software provides the ability to quickly and accurately assess the EPC rating improvements required to ensure a property meets MEES regulatory compliance.

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