The UK Government is being urged to provide urgent clarity on energy efficiency rules for commercial property amid warnings that policy uncertainty risks stalling investment, shrinking supply and damaging high streets and town centres.
Propertymark, which represents property agents across the residential and commercial sectors, has written to Martin McCluskey MP (main picture, inset), the Minister for Energy Consumers, warning that while ministers have confirmed tougher standards for privately rented homes, they have left commercial landlords and agents operating in a policy vacuum.
The intervention follows the publication of the Government’s Warm Homes Plan, which confirmed that privately rented homes will be required to reach an EPC rating of C by 2030.
While the move provides long-awaited direction for the residential sector, Propertymark says the absence of equivalent guidance for non-domestic buildings is creating growing uncertainty across the commercial property market.
NO FORMAL TIMETABLE
For several years, the industry has worked on the assumption that commercial properties could be required to meet an EPC rating of B by 2030. However, no formal timetable, interim targets or enforcement framework has been set out, leaving agents unable to advise clients on long-term investment decisions, lease structures or asset management strategies.
Propertymark says commercial landlords are increasingly reluctant to commit capital without knowing what standards they will be required to meet, by when, or what exemptions and financial support might be available.
Agents are reporting rising concern from landlords and tenants facing potentially significant retrofit costs, uncertainty over responsibility for improvements, and the risk that assets could become unlettable if new rules are introduced without sufficient lead-in time.
LACK OF CLARITY
The trade body also warns that the lack of clarity is particularly damaging for secondary commercial stock, including older offices, retail units and mixed-use buildings in town centres, where margins are already thin and retrofit costs can be disproportionately high.
In these areas, uncertainty risks delaying refurbishment and regeneration projects or prompting landlords to withdraw from the market altogether.
Propertymark has also raised concerns that the uncertainty around energy efficiency standards is being compounded by wider legislative changes.
Proposals in the English Devolution and Community Empowerment Bill, including restrictions on upward-only rent reviews and changes to end-of-lease arrangements, could interact with future MEES obligations in complex ways, further clouding investment decisions.
PRAGMATIC APPROACH
In the residential sector, the organisation acknowledged that confirmation of the 2030 EPC C target provides direction but warned that landlords are being asked to deliver substantial upgrades within a relatively short timeframe, often in hard-to-treat properties, without clear long-term funding commitments or sufficient flexibility. It reiterated calls for a phased and pragmatic approach to avoid reducing rental supply.
Propertymark said the absence of detail on interim milestones, exemptions, enforcement and financial support makes responsible planning impossible for both domestic and commercial landlords.
Without clear guidance, it warns, properties could be withdrawn from the market, pushing up costs for tenants and businesses and undermining the Government’s wider objectives on affordability, energy efficiency and economic growth.
The organisation has requested meetings with ministers and officials to discuss the technical detail of the Warm Homes Plan and is calling for a clear, coherent roadmap for non-domestic MEES alongside a more deliverable approach for the private rented sector.
Propertymark warns that without swift clarification uncertainty rather than regulation risks becoming the biggest brake on progress toward net zero in the property market.
