Large number of commercial landlords unaware of EPC changes

Large number of commercial landlords unaware of EPC changes

A significant number of commercial landlords are unaware of new standards on energy performance certificates coming into force in April 2023. 

A study by Handelsbanken found 39 per cent of commercial landlords are unaware of the forthcoming changes that will require all existing leased commercial properties to have an EPC rating of at least an E.

It is currently a legal requirement that commercial buildings must have a rating of at least an E before a new or renewal lease can be granted. 

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However, from April 2023 this requirement will be extended to both new and existing leases, meaning that landlords cannot continue to let or sublet a commercial property with an EPC rating below this.

The study, which surveyed 120 UK professional landlords with a minimum of four properties in their portfolio, found only 9 per cent have an EPC rating of E or above for all of their properties. 

Handelsbanken UK head of sustainability, Richard Winder said while the results are worrying, 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,” Winder said.

He advised landlords to start by consulting their existing energy performance certificates, to find the most cost-effective route to a higher energy-efficiency rating. 

Winder added: “At the same time, we would guide them towards taking a broader, longer-term view of sustainability, for instance by considering a property's resilience to heatwaves or severe weather, and how it might better support green transport choices and biodiversity."  

Barriers against making portfolios more sustainable

All respondents

The regulations make it too difficult


I don't have enough knowledge about how to make my portfolio more sustainable


I don't believe I could access the finance I'd need


I don't have the Capex to invest in making it more sustainable


Some / all of my property is listed so making upgrades is too difficult


Some 16 per cent of landlords surveyed said they plan to sell their properties because the new EPC ratings are daunting, primarily because they cannot afford to make the required changes. 

But many landlords are taking steps to upgrade their properties. 42 per cent of those surveyed plan to install insulation, while 36 per cent will invest in an energy efficient boiler and 30 per cent will fit double glazed windows. 

The average investment per portfolio is expected to be £95,400, or 3 per cent of the portfolio’s total value.