From April 2023, the minimum energy efficiency standards (MEES) that already make it unlawful for a landlord to grant a new tenancy or extend an existing tenancy on a poorly performing building will be tightened further in England and Wales. Savills analysis of the latest UK EPC register data shows 745 million sq ft of office stock is EPC rated below B and therefore not adhering to the proposed MEES regulations. In other words, 77 per cent of the UK office stock.

Much documented scepticism exists towards MEES and the required Energy Performance Certificate (EPC) which is pushing through new energy measurement tools. Whether or not MEES is the best measurement, or how it will be policed, distracts from the critical fact that we need to be better in our energy consumption if we are to move towards Net Zero. In fact, we can have seismic impact on our overall energy consumption in the property industry through physical upgrades and changes to the way we use buildings and the energy within them. Its important to look beyond the MEES deadline and the longer term view is about more than just meeting minimum standards. Here is why.

Improving efficiency does not have to mean significant CapEx. There is a common misconception that improvements required involve major recladding or similar upheaval and significant investment.  What we find from experience is that smaller upgrades along a property’s life cycle and habitual shifts have the biggest impact.  

Technology is changing, and quickly. Its becoming ever easier to introduce systems to measure and manage energy in buildings. As technology advances it should become more affordable too.

We are also all advancing in our understanding of energy efficiency. The cost of living crisis has made us all think differently about how we use our energy systems at home. This should make it easier to instil habitual change in the way we use places of work, albeit we need to encourage a mutual collaboration between occupier and landlord.

Occupiers are voting with their feet, with figures on new office leasing deals across the UK showing an obvious bias towards the most energy efficient new buildings on the market in the last 18 months. Ultimately, without addressing this fundamental requirement increasingly assets will be left stranded and values will dramatically fall.

Landlords unsure of their building’s performance should instruct an EPC assessment now. With updated regulations and subsequent software updates, results are likely to vary from older ratings. Retest the asset. As an industry we have a mammoth task on our hands, but at an individual level property owners can follow a relatively straight forward course of action to transform otherwise stranded assets.

Further information

Contact Nadeem Khan or James Evans

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