Green rules could make it impossible to rent some flats

Kasmira Jefford
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THE BRITISH Property Federation has called on the government to provide more clarity on the minimum energy standards that will be required by commercial and residential landlords beyond 2018 under new legislation.

Changes being brought by the Energy Act 2011 will mean that hundreds of thousands of UK properties with the least energy efficiency – ratings of F and G – could be rendered unlettable by 2018.

Delegates at a seminar in Cannes, where the property industry is gathering for its annual Mipim conference, heard that landlords will be forced to take on the cost of refurbishing or refitting their buildings to meet the government standards and to prevent them from becoming obsolete within six years.

While there is likely to be a green premium – higher rents for better performing properties – in the near term, government legislation will eat into the value of F- and G-rated properties, according to British Land boss Chris Grigg, who sat on the panel

Patrick Brown, BPF’s assistant director of sustainability, told City A.M. the government needed to make it clear whether E-rated and better performing properties faced a similar fate.

“What the BPF would want to see is an approach that took account of the natural opportunities that arise when a building is vacant. We would prefer the government to take an approach where only lease transactions which involved a change in occupancy were captured by the "minimum building energy performance standards framework” he said.