Yesterday we discussed how commercial property landlords are being urged to lower their rent prices and find new tenants for empty properties on the high street in order to help struggling companies. The demise of the high street has led many companies going into administration, which has led to some commercial landlords becoming extremely cautious of letting their properties out as the risk is now so high.
Now it seems there is even more bad news for commercial property landlords, especially those based in Bristol, as they have been warned that by 2018 all their properties must be energy efficient otherwise they will be banned from letting them out. For some, this isn’t too much of a worry as they can just improve on their properties, however in Bristol one fifth of commercial landlords own old warehouses and offices that will cost too much to upgrade and therefore are being advised to sell them on now.
At a briefing for property owners in Bristol earlier this week Richard Hill from Grant Latcham solicitors said: “Make no mistake this is Doomsday for some buildings. We can expect to see buyers and potential occupiers put off by E, F and G ratings as we move toward 2018. Although we anticipate a building’s EPC rating will go into the mix when new leases are being negotiated we are advising clients to identify and sell the dinosaurs before the markets re-price. Certain people are going to find themselves priced out of the market when these changes take effect.”
In order to improve the energy efficiency of houses across the UK the government have not only introduced the Green Act, which states that landlords cannot let out properties with an energy efficient rating of E or under after 2018, but also the Green Deal scheme. The Green Deal allows landlords to have work carried out on their properties which is paid for by the government, and comes with an extremely low interest rate of between five and seven per cent.
The government are trying to improve not only the UK’s environment through their schemes but also help tenants pay less in fuel bills which have been increasing drastically over the past few years. Landlords will also benefit from more energy efficient properties as it could make them more attractive to potential tenants and even reduce the cost of their landlord insurance policies.