Barry Shambrook, Partner at HartDixon, talks MEES
News | May 5, 2022
3 min read
You don’t need to be a climatologist to know that having your head in the clouds is no longer an option in 2022.
Intergovernmental scientists have made it crystal clear that it is a case of now or never to limit global warming; issuing a “code red for humanity” and stark warnings of increasingly extreme heatwaves, droughts and flooding if “rapid, deep and immediate” cuts in carbon dioxide emissions are not made.
The clock is ticking if planetary peace of mind is to be achieved and for those in the commercial property sector a crucial deadline is now less than one-year away, with the next phase of changes in the application of minimum energy efficiency standards (MEES) in England and Wales coming into effect on 1 April 2023.
It is a countdown that landlords – no matter how large or small their portfolio – should already be acutely aware of given it will climax in a prohibition of letting properties with an energy performance certificate (EPC) rating of either F or G.
There are exemptions, including when it can be demonstrated any improvements will reduce the market value of a property by more than five percent or if the required work will not ‘pay for itself’ through energy bill savings over a seven-year period, but seeking them is only likely to delay the inevitable.
As the UK strives for sustainability, it is widely accepted that MEES regulations will ramp up further with government proposals suggesting a minimum EPC rating of C will be required in 2027 and B in 2030.
Papering over the proverbial cracks by just doing enough to eke out an E could therefore prove an incredibly short-term strategy and it would be prudent for landlords to approach improvements with an eye on the likely expectations of the law – and tenants – in a decade’s time.
The expense of aiming high in the enhancing energy efficiency stakes might be an unwelcome one – not least given the fiscal benefit of reduced bills will often be a windfall for tenants rather than landlords – but it is necessary in a competitive market.
Thanks to modern design methods and technologies, new buildings and contemporary stock can achieve carbon neutral status and be the proverbial A+ students, which is a big tick for those potential occupants mindful of environmental, social and corporate governance. Older buildings can be trickier but experience suggests that even those constructed more than 100 years ago can achieve a B rating while preserving their historic features.
In brief, the better the grade, the more marketable a property becomes to companies conducting carbon audits.
Of course, to talk about the merits of MEES purely in the context of safeguarding future occupancy is to sensationally miss the point.
The drive for improvements is based on a very real need rather than a means for CEO’s keen to be seen doing the right thing by Mother Earth to “greenwash” their operations.
It is widely recognised that a huge amount of energy is expended in commercial buildings – the structures in which we work, play and produce – so reducing this consumption by even a few percentage points would have a big positive impact on the preservation of the planet.
The more efficiently we can heat, cool and light properties, the brighter the future will be for the environment. Reducing energy use also has an exponential effect on requirements to burn fossil fuels, wherever they may be derived.
However, given that changing the course of climate change was not a prerequisite when most property portfolios were created, it is understandable that landlords of older or lower-rated buildings may be unsure as to how best to meet MEES milestones.
For those puzzled by the conservation question, the team at HartDixon are ready to help. With a holistic knowledge of construction and the mechanical and electrical systems that bring buildings to life, we can quickly assess the feasibility of energy efficiency improvements and suggest the most practical and cost-effective means to improve the sustainability status of your stock.
Barry Shambrook, Partner