The initial impacts of Minimum Energy Efficiency Standards (MEES) in England
| DOI | https://doi.org/10.1108/JPIF-01-2020-0013 |
| Pages | 435-447 |
| Published date | 01 May 2020 |
| Date | 01 May 2020 |
| Author | Sarah Louise Sayce,Syeda Marjia Hossain |
| Subject Matter | Real estate & property,Property valuation & finance,Property management & built environment |
The initial impacts of Minimum
Energy Efficiency Standards
(MEES) in England
Sarah Louise Sayce and Syeda Marjia Hossain
University of Reading Henley Business School, Whiteknights Campus,
Reading,UK
Abstract
Purpose –The paper investigates the initial impacts on asset management and valuation practice of the
Minimum Energy Efficiency Standard (MEES) introduced in England and Wales from April 2018 for new
lettings.
Design/methodology/approach–The paper reports findings from a small-scalepilot study of valuers, asset
managers, lawyersand building consultants. Interviews were conducted over the summer of 2019 and explored
the impact on practice and market values and perceived links to the carbon reduction agenda. Data were
analysed thematically manually and using NVivo software.
Findings –Participants welcomed MEES but many had doubts about the use of energy performance
certificates (EPCs) as the appropriate baseline measure. Compliance was perceived as too easy; further,
enforcementis not occurring. Vanguard investors have alignedportfolios for carbon reduction; others have not.
Lease practices are changing with landlords seeking greater control over tenant behaviours. Valuers reported
that whilst MEES consideration is embedded in due diligence processes, there is limited value impact.
Research limitations/implications –The study is limited by its small-scale and that the MEES regulations
are not yet fully implemented. However, the researchprovides early findings and lays out recommendations for
future research by identifying areas in which the regulations are/are not proving effective to date.
Practical implications –The findings will inform investors, consultants and policy makers.
Social implications –Achieving energy efficiency in buildings is critical to driving down carbon emission; it
also has economic and social benefits through cost savings and reducing fuel poverty.
Originality/value –Believed to be the first post-implementation qualitative study of MEES.
Keywords Energy performance certificates, Minimum Energy Efficiency Standards, Market impact, Valuers,
Asset management
Paper type Research paper
Introduction
The case for minimum energy standards in buildings
UK government has long held ambitions to move towards a zero-carbon economy. One
important step was the Climate Change Act (2008), which sets up a carbon target of 80%
reduction by 2050, and progress towards that has been made (BEIS, 2019a); however this
target was enhanced in 2019 to zero-carbon by 2050 (BEIS, 2019b) in the light of increased
concerns around climate change.
Europe in general has an old and energy inefficient stock (BPIE, 2017); further there is a
slow rate of building replacement (Balaras et al., 2007;Artola, 2016) and rented stock is likely
to have a lower efficiency than owner-occupied stock (WGBC, 2017). Therefore, upgrades to
the built stock are critical to achieving climate change targets (IPCC, 2018). Collectively these
findings create a strong case for mandating energy efficiency improvements in
investment stock.
However, the European response has generally been encouragement rather than
imposition (BPIE, 2014). The prime vehicle is the energy performance certificate (EPC)
The initial
impact of
MEES in
England
435
The authors wish to acknowledge the the financial support of the Reading Real Estate Foundation. They
also wish to thank the interviewees who were so generous with their time.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 31 January 2020
Revised 9 March 2020
Accepted 12 March 2020
Journal of Property Investment &
Finance
Vol. 38 No. 5, 2020
pp. 435-447
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-01-2020-0013
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