How EPC Ratings Affect Your Commercial Property Value

This month we explore how Energy Performance Certificate (EPC) ratings affect your commercial property’s value. Energy Performance ratings not only influence operating expenses but also play a significant role in determining property value.  

The UK government have proposed new rules, from 2026 for new tenancies and 2028 for existing tenancies. In this article, we’ll explore what EPC ratings are, the factors that affect them, and why improving your property’s rating can boost its market appeal and compliance with upcoming regulations. 

 

What is an EPC rating?

An EPC or Energy Performance Certificate is a report that shows how energy-efficient a building is. Ranging from ‘A’ being the most efficient to ‘G’ being the least efficient. A better rating often means lower energy bills, and the EPC can help buyers or tenants choose a more energy-smart property. EPC is required when selling or renting a property and is valid for 10 years. A ‘C’ or above is generally considered a good rating. 

 

What factors effect EPC ratings?

An EPC rating is affected by several factors, such as: 

• Insulation 
• Windows 
• Heating Systems 
• Lighting 
• Hot water 
• Renewable Energy 

 

How EPC ratings can affect value 

A higher EPC rating means the property is more energy efficient. Making the properties heating and lighting bills cheaper. This inevitably attracts more buyers or tenants as the higher rating can increase the market value. 

So, if your property has a low EPC rating when you are looking to sell or rent your property then looking to improve the rating can increase the property’s value. If you are a landlord, then the property’s EPC rating you are renting out cannot be below E. 

 

What you can do to improve your EPC rating

The main way of improving your EPC rating is by ensuring you have proper insulation and draught proofing in your property. This will help to retain heat, so you won’t have to use your heating as much. Other ways include installing better doors and double-glazed windows which also help to keep more heat in. Getting an efficient, modern boiler can also improve a properties EPC rating. 

 

Benefits of improving EPC?

It will increase the value of the property, and will bring the long- term cost of bills down which makes the property more appealing for buyers. Having a higher EPC rating also supports a more sustainable market and planet. 

Improving the EPC now will prevent you from facing any penalty charges that will come in the future as new legislations are put into place. 

 

Government changes 

The UK government have proposed new rules, from 2026 for new tenancies and 2028 for existing tenancies. The proposed rules are as follows: 

• From 2026: All newly rented properties must have an EPC rating of C or better 
• From 2028: All existing tenancies must meet the same standard 
• Fines: Penalties of up to £30,000 for non-compliance 
• Exemptions for listed properties or if improvements exceed a cost cap. 

The government is investing in Help to Heat schemes across the UK to ensure homes can be kept warm for a cheaper price. This includes the: 

• Boiler Upgrade Scheme 
• Warm Homes: Local Grant 
• Warm Homes: Social Housing Fund 
• Energy Company Obligation 
• Great British Insulation Scheme 

This funding is delivered through installers, local authorities, energy companies and other bodies, not the government itself. 

 

With rising energy costs and increasing environmental awareness, buyers and tenants are paying closer attention to EPCs. By investing in improvements such as insulation, modern heating systems, and energy-efficient windows, property owners can enhance their EPC rating, reduce long-term costs, and attract more buyers or tenants. With government reforms on the horizon and penalties for non-compliance, now is the time to ensure your property meets the standards. A proactive approach not only safeguards your investment but also contributes to a greener future.

 

We are regulated by the RICS. If you require further advice on lease terms, rent reviews, valuation, or need professional advice then get in contact with us on [email protected] or 01179 200090.