Real Estate Is Moving Towards More Efficient Buildings, But There Is A Mountain To Climb

“Powering our net zero future”, the Government’s white paper setting out how it intends to evolve the UK’s energy system to reach net zero emissions by 2050 was published by BEIS in late 2020. Within this, the Government clearly signalled its intention to ensure that all rented non-domestic buildings will be EPC Band B by 2030. 

This is a significant challenge and I wanted to understand a bit more about the scale of it and importantly to see if there seems to have been any change in direction. Measuring the energy impact of a building on the environment is complex – there are many schemes, methods and standards, however as the regulations will target EPC certificates, this is where I wanted to focus. The team at RE5Q quickly analysed all of the EPC certificate data which gives us some indication of the scale of the challenge and the direction of travel.

Firstly, the scale of the challenge – the analysis suggests that of all non-domestic building EPC Certificates in England and Wales, only 11% of them have a rating of B or above. This suggests that up to 89% of buildings are going to need work before being lettable from 2030. Whilst there will be some buildings which have been improved since their last EPC, there is little doubt that the scale of the challenge is significant. 

Real Estate has been talking about the impact the industry has on the environment for years and so we also wanted to see if there was any suggestion of change. Again, the data shows that there is undoubtedly a positive trend, whilst only 11% of all EPC’s are B and above, 20% of the EPC certificates issued in the last year are at that level. At the bottom end of the scale, there is also an encouraging trend with 12% of all non-domestic EPC’s being rated F or G, whereas only 2% of those assessed in the last year are at that level.

So, what does this tell us? If all non-commercial buildings are going to have to be rated B and above to be rented from 2030, then there is a mountain to climb. EPC’s are a snapshot in time and so don’t necessarily show the full picture of the state of the market today, but they do indicate the scale of the problem we face and the direction of travel. Accepting this, the data clearly shows that a growing proportion of certificates are at the required level and there are far fewer buildings being rated at the lower end, however there is still clearly a long way to go.

Based on this analysis of EPC certificates, the property sector is moving in the right direction, but whether it is moving fast enough remains to be seen.

Source: Data insights are drawn from the government’s ‘Energy Performance of Buildings Data’ Open Dataset for England and Wales which dates back to 1st October 2008. The numbers presented in this article are rounded from the precise figures which were derived by partitioning the data into EPC bands and are accurate as at 31st December 2021.

Dan Hughes, Advisor at RE5Q