Many buildings in London have poor energy efficiency - will you be affected by new regulations?

In the wake of a damning report published last year, a number of new regulations have been created to ensure that London’s energy efficiency hastily improves.

The 2016 report published by the Association for the Conservation of Energy revealed that over one-third (37%) of non-domestic buildings in London were rated E or lower on their Energy Performance Certificates.

The report also revealed that around 25% (830,000) of domestic properties in the Capital held an Energy Performance Certificate with a rating of E or lower. This is due in part, to their age. In this respect, new buildings are far superior.

EPC ratings indicate the energy efficiency of commercial and domestic properties. Law states that an Energy Performance Certificate must be supplied to new owners or tenants of a property.

The EPC ratings run from A-G; the former rating indicate sound energy efficiency, while the latter indicates extremely poor energy efficiency.

This incriminatory evidence regarding the poor energy efficiency of many properties in London has forced government to take action with new regulations.

From April 2018, any properties in England and Wales rented in the private sector must hold an Energy Performance Certificate rating no lower than an E. This regulation will apply to new lets and tenancy renewals from said date. Existing tenancies will have until April 2020 to ensure their EPC rating is an E or higher.

So, now you are aware of new regulations, your next question will undoubtedly be – “will I be affected?”

The properties that will be required to comply with the new regulations include;

• Privately rented residential properties, both flats and houses (which hold an EPC).
• Privately rented commercial properties (which hold an EPC).
• Privately rented commercial property space within a larger unit (which hold an EPC).

If you believe that your property/properties apply to any of the aforementioned requirements, you must ensure that your property holds an Energy Performance Certificate, if necessary. If you have had a change of tenants or purchased the property in the last 5 years, your property will likely hold an EPC.
If you discover that your property does not hold such a certificate, and is required to hold one, it is advisable to ensure that you rectify this immediately. Once arranged, a qualified Domestic Energy Assessor will carry out a number of checks at the property, in what is a simple and inexpensive, yet essential process.
If, after the assessment, your property falls below the minimum requirements of the new regulations, you will need to make some changes to improve the energy efficiency within the building. There are a number of ways that this can be achieved, most notably;

• Improving loft and wall cavity insulations
• Improving boiler and heating systems
• Changing light fittings to low-energy alternatives
• Replace window glazing
• Installing solar panels

By April 2018, your property/properties will need to hold an EPC rating of A, B, C, D or E. Failure to achieve this by the aforementioned date could lead to a ban on new tenants or buyers until the issues are rectified and subsequently, heavy fines.
Those that may not be affected by the new energy efficiency regulations include;

• Property that is vacant for more than eight months per year
• Temporary buildings that will stand for two years or less
• “Architecturally significant” buildings whose appearance would be altered through energy efficiency improvements
• Stand-alone buildings with a total floor area of 50 square metres or less

Situations that may keep property owners exempt from penalties after the regulation date include;

• Buildings that have undertaken “cost-effective” improvements but still fall below an E rating, indicating a more structural issue
• Landlords that have been denied permission by third party owners to make the required energy efficiency improvements
• Landlords whose tenants have denied consent for energy efficiency improvements in the property
• Landlords who provide written evidence from a qualified installer explaining that energy efficiency improvements would be detrimental to the structure of the property.

It is important to note that the four situations mentioned above do not make property owners exempt from the laws of the new regulations. It simply means that landlords and owners may be exempt from heavy fines due to the mitigating circumstances. Bans on new tenants and buyers will still be in place until required changes can be made.

UPDATE: New green strategy proposed for City of London to make switch to 100% renewable energy by October 2018.