CBRE warns new legislation could impact on property rental values

Investors in the commercial property sector should be aware of new legislation currently going through Parliament that is likely to impact on the rental values of properties. CBRE has just released information about the current Energy Bill that will mean from 2018 it will not be possible to let energy inefficient buildings.

The introduction of the Private Rented Sector Regulations 2011 by the Department of Energy and Climate will set minimum energy ratings and will require buildings to have an Energy Performance Certificate (EPC).

Richard Eames from CBRE in Bristol said: “Investors should be aware of this new legislation and are advised to assess the possible impact of the regulations on their portfolios. The market is likely to respond to this legislation by requiring a discount on properties that will need significant expenditure to bring them up to the minimum standard.”

Although the precise coverage of the regulations is yet to be provided, it is expected that some qualifications to the requirement will be agreed. This could include the requirement that landlords will not have to face any upfront costs as long as they have either carried out the maximum package of measures supported by Government schemes or met the minimum requirements. In addition, certain types of properties will be exempt from the regulations – these exemptions will be consulted on as part of secondary legislation.