Blog | Commercial Auction | Commercial Investment | The Environment

The roadmap is clear – improving your EPC needn’t be scary

Over the last decade, EPCs have evolved from being something to dig out of a dusty filing cabinet at point of sale to being an essential part of the movement to manage our energy use, from your own home to the local Amazon warehouse and indeed nearly every lot we sell at auction.

In that decade, the private investor has bought around 4,000 commercial properties from Allsop’s auctions and a further 10,000 residential assets. Whilst many will have been inspected and surveyed by their new owners, some will have never even been seen. Up until recently, buyers’ approaches to EPC standards neatly fell into one of the two buckets – either a cross-your-fingers-and-hope-for-the-best or a shrug of a shoulder.

What was a minor irritation for many of the purchasers of those 14,000 assets over the past decade has become a looming monster in the closet. The Minimum Energy Efficiency Standards (MEES), known as the basis for the EPC, have grown teeth, and from 1 April 2023 investors will not be able to receive rent or sell their asset unless the EPC rating is an E or better (the scale running from G at the lower end to A at the most efficient level).

But the monster is not as scary as some might think, and is, in fact, easily tamed.

Investors should be able to reach the basic E grade, and higher, in good time. And, importantly, without vast expense if a few basic rules are applied.

When we advise clients on the issue, we provide them with five simple steps to improve the EPC rating. Having developed these with the help of Martin Zambrano from Luis and Bell Surveyors, whom we recently spoke to as part of Allsop’s Propchat podcast, we’re now able to share them with the lucky readers of EG.

Improving your EPC in five easy steps

Before we kick off, one overriding fact to bear in mind is that the assessment looks at the plant and structure of the site, not energy expenditure as that will depend on occupation and use.

The other piece of advice before you begin is to check the status of your current EPC. If it’s old, it may have been done remotely on the basis of wild assumptions, so a new assessment should be sought to clarify the position.

  1. Lighting: efficient lighting has been the norm for many years, however, if a building is on the end of a long lease this may not be the case and is easily remedied.
  2. Control systems: from basic analogue style local thermostats to smart systems like Hive, these will help control energy use and subsequently improve the rating.
  3. Hot water: in smaller properties, a point of use system can be much more efficient than a conventional cylinder where hot water use can be minimal and the heating wasteful.
  4. Insulation: this seems obvious but investment in simple and in some cases, inexpensive products which can be hidden in roof and ceiling voids can have a huge impact on the rating.
  5. Know your building: some landlords might never have seen their building and have no record of its structure. As a result, they are unable to provide the assessor with the necessary starting point to make an informed decision rather than take a more conservative view based on the worst-case scenario. So, learn as much as you can about your building and make sure the assessor has as much information as possible.

Whilst some of our ever-eager auction buyers rarely take heed from anyone but their lawyers, they could usefully add a good energy assessor to their network. The point of sale will be dealt with by the vendor, but the long-term potential may well will be impacted by a poor understanding of the energy needs of the investment.

The concept of MEES is here to stay and is governed by a clear code, with appropriate exemptions. By April 2030 the requirement is for a B, with incremental steps in the “compliance windows”, the first of which is a C by April 2027. We have a clear idea of where we’re going and the satnav is working, so it’s time to crack on.

Related Content

You can also listen to our podcast, where George is joined by Martin Zambrano (Luis and Bell) to discuss upcoming changes to EPC requirements and five easy ways to improve your EPC score.

A MUST LISTEN for all Landlords and Tenants ahead of April 2023 deadline.

The podcasts presented here are for general guidance and represents opinions of our teams based on the property market at the time of recording. All details are correct at time of recording.

George Walker

Partner & Auctioneer Commercial Auction

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