Race to comply with environmental legislation leads to a scramble for services
New legislation requiring commercial properties to produce Energy Performance Certificates comes into effect on 6 April 2008 and will see the owners of over 440,000 buildings scrambling to get an EPC issued by a small number of assessors by the end of the year.
An EPC will be required for all commercial properties when bought, sold or let and the legislation will be phased in over the next six months, starting with large buildings over 10,000 square metres. The new law is part of the government's strategy to meet climate change targets agreed under the Kyoto Protocol.
"There is a real urgency to this legislation," says Nigel Coote, Head of Measured Business Services for Plowman Craven, the UK's leading measurement company. "If you don't start the process of acquiring the certificate early, you might struggle to get it done, resulting in a fine of up to £5,000 or a lost sale or rent."
"Of the approximately 2.5 million buildings that fall within the non domestic commercial category, 140,000 of them will be sold and 300,000 leases will change hands this year, which means 440,000 EPC's need to be issued by only a handful of assessors. Our advice to all our clients is to start that data collection process now," says Coote.
Energy Performance Certificates are based on a very complex calculation using accurate floor plans broken down into zones of use. Each zone needs an assessment of its construction details, its heating system, lighting, energy insulation and information on mechanical and electrical engineering plant. The information is extracted from detailed drawings and the technical assessment, entered into a software system and the rating and recommendations for improvement are made.
Plowman Craven already holds a huge depth of accurate information on file for tens of thousands of buildings in the UK, which could save building owners time and money in complying with the new legislation.
"One survey fits all, if it's detailed enough," explains Coote. "We advise our clients that if they need a survey done, we can make it as useful an exercise as possible. The information required for an EPC is similar to that for determining the net area for lease plans, for the Land Registry survey, or for architectural purposes for building alterations. We can really add value to a client's requirement to comply with the legislation."
Nigel Coote admits the new legislation provides no immediate incentive to being energy efficient, but a high energy rating could enhance property value, attract better rents and appeal to green customers.
"Some of the major UK retail firms are a long way down the green route, aiming to be carbon neutral. The EPC rating will be very important to them on any buildings they buy or lease and they will want to take on board the recommendations for energy improvements. Retail companies have really led the way in demonstrating their green policies, from recycling carrier bags to reducing packaging, but much of that change is the result of consumer pressure. Office blocks don't really face that pressure, so it will be interesting to see if analysing the energy performance of buildings could kick-start an environmental movement for other commercial sectors," he says.
Peter Folwell, Head of Property Services for Plowman Craven, says the effectiveness of the legislation to improve the energy efficiency of commercial buildings will be limited.
"The introduction of solar panels or wind turbines to a building might produce a better rating, but it's not necessarily going to improve energy performance. This could become a huge issue for older buildings and particularly listed buildings, where there are so many restrictions on materials and alterations that it will make it impossible to achieve anything but the lowest rating," he says.
"The EPC rating will have implications on the valuation of commercial properties, but the question that many of us in the property industry are asking at the moment is how long before it also affects our rates and taxes as well? Once the dust settles from the new legislation, will this become a vehicle to raise funds by penalising the building equivalent of gas guzzlers?"