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UK commercial property owners must make improvements

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Almost a fifth of UK commercial property owners must make improvements to their buildings in order to comply with government energy standards or risk being barred from letting them, new research has found.

The Government’s Energy Act, which was passed in the last Parliament, includes rules that mean from 2018 it will be unlawful to rent out a business property which fails to meet the minimum energy efficiency standard – an “E” rating.

Research by property agent Cushman & Wakefield found that almost 20pc of commercial property buildings currently fall into the “F” or “G” categories – meaning they will need to make improvements before the new rules come into force.

A further 19pc are rated “E” and sit just above what will be the legal cut off. In total, nearly 40pc of all properties could face a significant performance risk, the research found.

Any building which does not meet this rating would be classified as “sub-standard”, causing its value to drop significantly. Not complying with the new regulations also risks penalty fines of up to £150,000.

The changes in legislation are likely to be worrying for some commercial property investors and landlords who may have to make costly changes to their buildings at relatively short notice.

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