EPCs Asset Value Warfare Presentation to Five Counties Conference Morning Session

Transcription

1 EPCs Asset Value Warfare Presentation to Five Counties Conference Morning Session 24 February 2016 Martin Gibbons MRICS Running order The energy trilemma EPCs the basics Why upgrade Energy Efficiency Regs EPC Plus solution 24 February

2 COMPETITION! In England & Wales How many domestic EPCs are there? How many commercial EPCs are there? 24 February

3 No. 1 Cost Oil - Price Volatility $17 a barrel $65 a barrel July $144 a barrel and Goldman Sachs predicts $200 a barrel by summer 2009 July $65 a barrel! Today - $31 a barrel 24 February

4 Passat horror! Go electric 24 February

5 No. 2 Carbon Carbon emissions priced in Politicians U-Turn 24 February

6 No. 3 Security Britain s new best friends EPCs the basics European Directive 2003 Estimated energy performance based on CO₂ emissions October EPCs required on all buildings from FIRST DAY OF MARKETING 24 February

7 EPCs the basics Valid for 10 years Landlord and agent have legal responsibility EPC grade on all property advertising Non-compliance fine ,000 pcm WHY UPGRADE? 24 February

8 Impact on lending Impact on value RICS paper 2013 Investment bench-marking 24 February

9 The Energy Efficiency Regulations 2015 Energy Act 2011 Minimum Energy Performance Standard (MEPS) Minimum Energy Efficiency Standard (MEES) That F & G thing That 2018 thing The Energy Efficiency (Private Rented Property) (England & Wales) Regulations 2015 Biggest Impact - Commercial 24 February

10 Biggest Impact - Residential The Energy Efficiency Regulations 2015 Commercial Grade E-17%, Grade F-9%, Grade G-10%. Landlords must upgrade sub-standard F & G buildings. 1 April 2018 new lettings & renewals. 1 April 2023 all other commercial leased buildings. 7 year payback period test. 150,000 fines for non-compliance. 24 February

11 The Energy Efficiency Regulations 2015 Domestic April 2016 tenants right to request consent to make energy efficiency improvements. But tenant has to pay for upgrade. April 2018 EPC of Grade E minimum for new lettings and renewals. But landlord has to pay for upgrade! April 2020 All privately rented domestic properties must be EPC Grade E or better What About Exemptions? Licences Upgraded and still F or G Consent refused Devaluation or property damage Public Exemption Register five years max 24 February

12 The Energy Efficiency Regulations 2015 Upgrade costs range from 1-34 per sq ft. Do upgrades during void periods. Include in future Asset/Management Plans. Grade F & G is only the start. Energy Performanceof Buildings Regs2007 Purpose: Energy efficiency labelling roll-out Regs and more Regs! Energy Efficiency Regs2015 Purpose: To force landlords to improve the worst buildings EPC F & G Effective from: April 2008 Effective from: April 2018 Trigger: Sales and fresh lettings but not lease renewals Trigger: Fresh lettings and lease renewals but not sales Listed Buildings From EPCs were required. From Jan 2013 onwards EPCs no longer required. Listed Buildings: Regs only apply only if Listed building has existing EPC and it is Grade F or G Fines: Max 5,000 Fines: Max 150, February

13 PI Insurance Known since 2011 No advice, no defence Licence for alterations Add to templates Lessons learnt over past 8 years Average Grade D Grid electricity is an EPC killer Building age post 2002, 2006, 2010, 2014 Old EPCs New EPCs - April 2011 & May February

14 COMPETITION WINNER EPC labelling roll-out As at February 2016 Residential EPCs 15,022,986 Commercial EPCs 624,809 50% of all stock now assessed 24 February

15 All residential and commercial EPCs for England & Wales can be found at epcregister.com ndepcregister.com Vital s unique EPC Plus service. Matrix of options EPC Grade enhancement Running cost reduction Capital cost Carbon reduction Payback period/roi UK wide service 24 February

16 Implementation of Recommendations Rec 1 Rec 2 Rec 3 Rec 4 Rec 5 EPC PLUS service EPC Rating Existing E 112 EPC Score Improvement Cumulative Cost (ex VAT) T5 lighting As above plus: Gas boiler As above plus: Air Permeability improvements As above plus: Replace Roller Shutter Door As above plus: Install 6 kwp of PV D ,000 D ,000 D ,000 D ,000 C ,000 Top Tips for Chartered Surveyors 1. Collect EPC data on existing buildings: analyse date, score and grade. Commission EPCs for gaps. 2. Upgrade plans: Commission EPC Plus for E, F & G buildings. 3. Commission EPC Plus prior to new acquisitions and refurbishments. 4. Be very careful with PI risk. All advice refer to EPCs. 5. Make hay. Wonderful business opportunities. 24 February

17 Sales Plug Vital provides: Energy Performance Certificates EPC Plus analysis reports Asbestos Surveys Fire Risk Assessments Floor Plans National service at competitive rates Thank you for your attention Questions please For FREE advice contact Martin Gibbons MRICS February