Property valuation in the UK: energy efficiency legislation and its impact on valuation
| DOI | https://doi.org/10.1108/JPIF-05-2018-0031 |
| Pages | 383-390 |
| Published date | 27 July 2018 |
| Date | 27 July 2018 |
| Author | Nick French,Jason Antill |
| Subject Matter | Real estate & property,Property management & built environment |
Property valuation in the UK:
energy efficiency legislation and
its impact on valuation
Nick French
School of the Built Environment, Oxford Brookes University,
Oxford, UK, and
Jason Antill
PureRES, London, UK
Abstract
Purpose –The purpose of this paper is to provide an insight into how the new energyefficiency legislation in
the UK is impacting upon the valuation of certain properties. This paper looks at how to adapt implicit
valuation models to reflect the new risks of the impact of legislation.
Design/methodology/approach –This practice briefing is an overview of the new legislation and
comments on the appropriateness of valuation models in different scenarios.
Findings –This paper analyses the likelihood of capital and rental value changes under the new energy
efficiency guidelines.
Practical implications –The role of the valuer in practice is to identify the impact of the new legislation on
the value of the subject property and choose the correct model for the valuation task in hand.
Originality/value –This provides guidance on how valuations can be undertaken to reflect any impact of
the new energy efficiency legislation.
Keywords Property valuation
Paper type Technical paper
If, at the date of valuation, the market does not differentiate “sustainable”and “non-sustainable”,
there will be no impact on Value (RICS, 2009).
Introduction
In a free market, sustainability will only have an impact if the occupiers of properties
consider that the “sustainable elements”make a contribution (perceived or real) to the
bottom line. Occupiers will only pay for specifications that impact positively upon their
businesses. That said, legislation will have an impact if it restricts occupation.
As of the 1 April 2018, the UK government introduced Minimum Energy Efficiency
Standards (MEES) on investment buildings (in England and Wales[1]) for all new lettings.
There is a schedule to extend these regulations to continuing lettings in 2020 for domestic
buildings and 2023 for non-domestic buildings. The deadline of April 2018 will only apply
to lease renewals and new lettings. However, from 1 April 2023 it will apply to all
current leases.
Full details of the legislation and the need for Chartered Surveyors to be aware of, and
knowledgeable, about the regulations from a property management stance are included in
the RICS (2018) Insight Paper, “Minimum Energy Efficiency Standards (MEES): Impact on
UK property management and valuation”. This paper looks at the impact of the regulations
on valuation.
EPCs
In simple terms, subject to conditions and exemptions, the new legislation makes it
unlawful for a landlord of a domestic or commercial property to let the property of it has
Journal of Property Investment &
Finance
Vol. 36 No. 4, 2018
pp. 383-390
© Emerald PublishingLimited
1463-578X
DOI 10.1108/JPIF-05-2018-0031
Received 2 May 2018
Accepted 2 May 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
383
Property
valuation in
the UK
To continue reading
Request your trial