Waiting for a slew of new rules and regulations around energy efficiency to kick in feels like the calm before the storm. While it’s tricky to give clients specifics about what’s set to change in the next 18 months and how it will impact their strategy going forward, we can at least prepare them for these changes – and there will be many – although I suspect there will also be some unintended consequences.

Upcoming EPC reform and updated methodology are long overdue and will no doubt result in amendments to the current cost-based metric by introducing others such as smart readiness and level of comfort. We’ll all have to get used to looking at domestic EPCs differently, but it will mean we won’t be able to compare like for like; an A achieved on the previous EPC scale will be different to an A under the new version. Homeowners will also have to grasp some counter-intuitive findings; they might get a good score using a comfort metric but see higher bills because of fuel prices.

News that DESNZ is about to confirm (hopefully by April) that commercial landlords will have to reach EPC B by 2031 is very welcome. Although carbon-focused commercial EPCs won’t radically change, when you factor in rising material and energy prices, the current seven-year payback period will be harder to achieve. This period could change but I suspect we’ll see more exemptions registered as a result, which won’t always be beneficial in the long-term. For a landlord, it’s about weighing up an EPC rating with rent flow; claiming an exemption on a building with an E band EPC means you can carry on renting it out, but investment managers might devalue the building as a result.

The finance sector will have an increasingly significant role in conversations about sustainable lending when looking at their risk profile and order books. Banks usually want a 20% return on green loans so ask a lot of their existing facilities and regularly review what they’re lending against. They may not terminate existing lending, but might not renew, or give more advantageous loans and offer attractive sweeteners for energy efficient properties. A survey we did recently for one property investor developer with 14 retail units worth £230 million who was looking to refinance resulted in the bank offering to remove the £30,000 arrangement fee if he could get them all to a B rating.

Other imminent changes include the Future Homes Standard – part of the Part L of Building Regulations – set to launch this year, which will ensure new homes produce 75-80% less carbon emissions than current regulations, by improving heating and hot water systems. There are also plans to replace the Standard Assessment Procedure (SAP) and Reduced Data SAP (RdSAP) methodologies with the Home Energy Model next year. Along with potentially more detailed assessments, landlords might find that their properties are rated differently under the new model, influencing their investment decisions when making energy efficiency upgrades.

Our sector will undoubtedly adapt, but during this hiatus it’s important we focus on the numbers to evidence our work and worth. Commercial landlords and lenders increasingly ask for information about asset value, rental value and yield as well as emission data when thinking about building refurbishment, but much of this data isn’t readily available. We always encourage clients to consider the importance of documenting the retrofit process rather than waiting until the end of a project to look at the figures, so they can better quantify their investment. Our work with Assura is a great example; we raised the EPC rating on 116 buildings to a band B between over three years and by could demonstrate this would return almost £395,023 a year and £4.3 million to the NHS over the next 10 years, based on electricity at 29p per kWh. These results help make the case for spending on future works. Data can also be gleaned by talking to other investors who can pinpoint where they’ve saved money on energy bills.

Aside from simply waiting for regulation to enforce new standards of energy performance, perhaps commercial landlords could target net zero rather than simply aiming for a better EPC rating. It’s clear that a lot of big businesses aren’t relying on government policies to do all the heavy lifting and recognise that making green improvements is vital for both long-term profitability and business resilience – regardless of a sometimes-arbitrary EPC band. The immediate return on investment might not be obvious, but there are many other reasons to go green: attracting good tenants keen to rent buildings with strong environmental credentials, securing an income stream, and adding value to an asset by boosting its rental profile. In these uncertain times, that message can help clients keep the faith.