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The summary of MEES regulations for 2023

In a plan to achieve zero CO2 emissions by 2050, last year, the government raised the standards for current overheating, fabric, and ventilation regulations.

As of June 2022, all new residential buildings must cut carbon emissions by at least 31%, whereas non-residential sites must be compliant with a reduction of at least 27%. These regulations also contribute to the Future Homes and Building Standard project, which will take effect in 2025.

Another measure to take effect in the net-zero emissions plan was that on 1st April 2023, it became unlawful to grant a lease of a commercial property which was deemed sub-standard (with an EPC rating of F or G), unless:

  • there has been a consent exemption where a third party (a tenant, superior landlord, lender or the planning authority) restricts improvement works;

  • the improvement works would contribute to a reduction in market value by more than 5%;

  • the property falls under the all-improvements made exemption "where all relevant energy efficiency improvements have been made (or there are none that can be made) and the property remains sub-standard, or situations where works would exceed the 7-year payback rule." (Addleshaw Goddard, 2022)

As it stands currently 58% of landlords are aware of the current and upcoming changes, while just over half the landlords understand what those changes require in full detail. That is why we are now in the process of educating our brokers and borrowers, as the more support and information they get, the better they will be able to handle the situation.

Having spoken to dozens of befriended landlords over the last year, at least two-thirds of them have asked for more support during the transition phase and have indicated an increase in rents to help them cover the costs of such changes. To assist clients who may not have the funds to bring their properties up to the required standard, lenders like us can offer more flexible loans as well.

If you would like to find out what we can do for you in terms of EPC rating improvements or green loans in general, call us on 02070 521 652.


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