Brushing aside speculation it was having second thoughts the government has published a consultation on minimum energy efficiency levels for commercial lets.  The intention is to have regulations in place before the election to allow the property industry to prepare for the start date of 1 April 2018.

These are some of the government’s proposals:

  • The minimum rating is E.
  • A landlord of an F/G property must do works to increase efficiency.  These may raise the rating above F.  However, this is not essential if the works satisfy the Golden Rule in the government’s Green Deal, namely that the reduction in the energy bill outweighs the costs of repaying any Green Deal loan in the first year after the works.
  • The start date is 1st April 2018 for lettings granted on or after that date.  Lettings granted before then become subject to the regulations by April 2023.
  • Exemptions include:
    • lets of six months or less;
    • leases over 99 years;
    • lets which don’t require a landlord to produce an EPC; and
    • where the landlord cannot obtain consents to do the works e.g from a sitting tenant.

Some of these exemptions bring with them paperwork and bureaucracy.

Some proposals may attract criticism e.g: lease renewals are included; no exemption for listed buildings; and how practical is it to include sub-lettings of part of a building.

Will plans change as a result of the consultation process?  Perhaps but the timetable is short; the consultation period ends in early September.  This suggests the government has made up its mind.  At least now the property world has something concrete to allow it to prepare for 1 April 2018.