Energy performance requirements are becoming an increasingly important consideration for property owners, investors and landlords across both the residential and commercial sectors.

While EPC compliance is often viewed as an administrative requirement, changes in legislation and growing market awareness mean that energy efficiency is now having a much greater influence on:

• Property marketability
• Letting potential
• Investment appeal
• Long-term value

For valuers, understanding how these factors interact with the property market is becoming increasingly important when assessing both residential and commercial assets.

Current EPC Requirements

Under the current Minimum Energy Efficiency Standards (MEES), privately rented properties in England and Wales must achieve a minimum EPC rating of E.

This applies to:

• Residential rental property
• Commercial property
• Both new and existing tenancies

Properties falling below this standard may be subject to restrictions on letting, alongside potential financial penalties.

While the current minimum threshold is EPC E, the direction of travel is clear, with further tightening of standards anticipated over the coming years.

Proposed Changes and Future Standards

Future legislation is widely expected to introduce higher minimum EPC requirements across both sectors.

For commercial property, minimum standards of:

• EPC C by 2028
• EPC B by 2030

have been widely discussed.

In the residential sector, proposals for stricter EPC requirements in the private rented market continue to evolve, with increasing pressure for landlords to improve energy performance.

Although implementation dates and final details may change, it is clear that:

• Energy efficiency is becoming a more significant regulatory issue
• Older property stock may face increasing challenges
• Buyers, tenants and lenders are paying closer attention to EPC ratings

The Impact on Property Values

Energy efficiency can influence property values in several ways.

For both residential and commercial assets, poor EPC ratings may affect:

• Buyer and tenant demand
• Running costs and affordability
• Access to finance
• Future capital expenditure requirements
• Long-term investment attractiveness

Properties requiring substantial upgrade works may become less appealing to purchasers or investors, particularly where uncertainty exists around future compliance costs.

Conversely, well-performing buildings may benefit from stronger demand and improved marketability.

Older and Traditional Buildings

Many properties across Lancashire and Cumbria – both residential and commercial – consist of older or traditional construction.

This includes:

• Period housing
• Rural property
• Stone-built buildings
• Older retail and mixed-use premises

Improving EPC performance in these types of assets is often more complex than in modern buildings. Works may require careful consideration of:

• Construction methods
• Heritage considerations
• Tenant occupation
• Cost versus value impact

As a result, understanding the relationship between EPC requirements and market value requires more than simply reviewing an EPC certificate in isolation.

Why This Matters in Property Valuation

When undertaking a valuation, it is increasingly important to consider how energy performance may affect:

• Current market demand
• Future saleability
• Investment risk
• Letting prospects
• Potential future expenditure

This is particularly relevant in:

• Investment property valuations
• Pension fund (SIPP and SSAS) valuations
• Secured lending valuations
• Probate and inheritance tax valuations

Lenders, investors and purchasers are all becoming more aware of the implications of EPC performance, meaning valuers must understand both the regulatory position and the realities of the local property market.

Local Market Knowledge Matters

The impact of EPC-related issues can vary significantly depending on location, property type and market sector.

At Armitstead Barnett, we provide RICS valuations across Lancashire and Cumbria, including:

• Garstang
• Clitheroe
• Kendal
• Burscough

And surrounding areas such as:

• Preston
• Lancaster
• Fylde and Lytham
• Leyland
• Chorley
• Blackburn

We regularly advise on valuations involving:

• Residential property
• Commercial and mixed-use property
• Investment assets
• Pension fund (SIPP and SSAS) property
• Probate and estate matters

Our experience across both residential and commercial markets allows us to understand how evolving EPC requirements may influence value, marketability and investment performance in different sectors.

Planning Ahead

For property owners, landlords and investors, energy efficiency is likely to remain an increasingly important factor in the years ahead.

Reviewing EPC ratings and understanding potential future obligations early can help:

• Avoid disruption during transactions or lettings
• Plan improvement works more effectively
• Protect long-term value and marketability

As regulations evolve, informed professional advice and a clear understanding of market conditions will become increasingly important.

Need Property Valuation Advice?

Armitstead Barnett provides independent RICS valuations for residential, rural and commercial property across Lancashire and Cumbria.

We regularly advise clients in relation to:

• Probate and inheritance tax valuations
• Pension fund (SIPP and SSAS) valuations
• Secured lending
• Investment and transactional matters

If you would like to discuss a valuation requirement or property matter, our team would be pleased to assist.