This article originally appeared in Bloomberg on 7 February 2023
(Bloomberg) – – The first stage of the UK government’s tough new rules designed to prompt landlords to upgrade the energy efficiency of their properties come into effect im April. So far, they’ve had little effect.
More than 5% of all commercial property in the UK totaling 4.75 billion square feet — about the size of Barbados —- will become illegal to rent from April 1, according to government data. That’s down from 7% in 2021, suggesting most landlords with poorly performing buildings have yet to act, an analysis of the data by Coyote Software shows.
“There’s already so much pressure on the sector and this is just coming at the worst possible time,” said Coyote Chief Executive Officer Oli Farago. “This is absolutely indicitive of investors’ preparedness for the mass of ESG regulation that’s coming.”
The UK government laid out plans to improve the energy efficiency of the country’s building stock in 2020. The rules centre on so-called Energy Performance Certificates that rank buildings efficiency on a scale from A to G. All buildings rated F or lower will be illegal to rent from April, with the minimum requirement rising to C in 2027 and B in 2030.
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