NEW Government legislation on the energy efficiency of buildings will have a significant effect on property values in Yorkshire, it is claimed – leaving landlords exposed to diminishing property values and potentially unlettable premises.
The Energy Act 2011 will make it unlawful to let buildings with F and G rated Energy Performance Certificates after April, 2018.
Darren Hughes, regional director for commercial property agent Lambert Smith Hampton, said landlords had to act now to avoid falling property values and significant improvement costs in the future.
He said: ““Proactive investors and landlords should be starting to identify which of their properties are at risk of falling foul of this new legislation and putting a plan in place to improve the future environmental performance of their properties.”
Colleague Jonathan Nellar, director of building consultancy at LSH, said: “This legislation could have a significant impact on the marketability and value of investment stock well before the 2018 enforcement date.
“Investors and landlords are already under a huge amount of pressure in the current climate.
“Additional expenditure will undoubtedly impact on the market, particularly for secondary stock where we are already seeing the effect of physical obsolescence on pricing and marketability.”
Government figures suggest that as much as 18% of buildings with an Energy Performance Certificate fall into the bottom two categories.
Said Mr Nellar: “Statutory compliance costs will increase if work isn’t done to improve environmental performance.
“It’s far better to identify the reasons for poor performance and carry out efficiency improvements during routine maintenance or periodic refits.
“Landlords also need to revisit their leases to understand to what extent compliance costs are recoverable from the tenant and which they will have to bear themselves.
“Tenants will be reluctant to agree leases on poor performing buildings, so this will have an inevitable effect on values.”
