JLL Residential

One year to go until Minimum Energy Efficiency Standards come in to force

London, 27th March 2017.

The Energy Efficiency Regulations 2015 (also known as the Minimum Energy Efficiency Standard or MEES) passed into law on 26 March 2015. From 1 April 2018 it will be a requirement for any residential rental property to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). JLL can help ensure landlords are compliant with the new legislation, assess any potential risk across portfolios and project manage a refurbishment plan for any improvements required.

Emma Hoskyn, director, Upstream Sustainability, JLL, said: "The MEES regulations have been a long time on the side lines and the property industry is breathing a collective sigh of relief that they have made it through the Parliamentary process before the election. With the certainty we now have, the industry can be more sure of the actions needed to prepare for 2018 and 2023. For landlords this will mean trying to uprate EPCs at intervention opportunities or identifying appropriate exemptions and how to manage situations when either they cannot get consent to implement upgrade works or it is proved uneconomically viable. Every area of the property industry will be affected by these regulations."

Speaking in 2015 Chris Ireland, former UK chairman and lead director, UK Capital Markets, JLL, and now JLL's UK Chief Executive, added: "These are the most significant energy efficiency regulations to impact existing buildings in our time. The regulations present a real opportunity to improve the efficiency of the existing stock and leverage the benefits to both landlords and occupiers. However, the challenge is to manage the potential risk of accelerated value depreciation."

The minimum EPC rating of Level E will apply to all new leases and to all leases in existence from April 2023. Properties undergoing lease renewal or extension, only where an EPC is already in place, will be in scope. Penalties for non-compliance begin at £5,000, rising to a maximum of £150,000. The regulations also apply to the domestic sector, however although the initial implementation date is the same, they would apply to all domestic leases from an earlier date of April 2020. Additionally, domestic sector tenants will be able to request energy efficiency measures from their landlords from April 2016.