Pictured: LSH's Adam Ramshaw
Property investors should act now to ensure that new Government
legislation on the energy efficiency of buildings does not leave
them with unlettable premises, according to experts at national
commercial property consultancy Lambert Smith Hampton (LSH).
The Energy Act 2011, which has received Royal Assent, will make
it unlawful to let buildings with F and G rated Energy Performance
Certificates after April, 2018. This means investors could face
significant improvement costs to mitigate the potentially
disastrous falls in the value of older buildings.
LSH Associate Director Adam Ramshaw said, "The degree of risk
attached to F and G rated properties is high, and will get higher
as the 2018 deadline approaches. Investors should act now to
understand the reasons behind a property's poor rating."
He added, "Investors should act immediately to establish the
cause of the poor ratings and establish the cost and affordability
of putting things right to achieve a higher rating. This liability
could lie with the landlord or tenant depending on the terms of the
lease. As we get closer to 2018, Energy Performance Certificates
will assume a greater significance. Investors should act now. While
2018 may seem a long way off, the impact on values will be felt
much sooner.
"This legislation is likely to have a significant impact on the
marketability and value of investment stock over the next five
years and beyond. Landlords are already under a huge amount of
pressure in the current climate. Additional expenditure will
undoubtedly impact on the market, particularly for secondary stock
where we are already seeing the effect of physical obsolescence on
pricing and marketability."
Government figures suggest that as much as 18 per cent of
buildings with an Energy Performance Certificate fall into the
bottom two categories, spread across all asset classes.
"It's also important that landlords of D and E rated buildings
don't get complacent. While F and G rated properties will suffer
the first sanctions, falling values will affect other buildings too
over time as regulations get more stringent. Investors and
landlords should act now to secure the highest possible energy
rating."
For more information about Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk