Property valuation in UK: climate change targets and the value of UK investment properties – a change in sea level[1]

Abstract

PurposeThe UK government, in late 2019, announced new proposed targets for the energy efficiency legislation in the UK, MEES – Minimum Energy Efficiency Standards. The current suggestion is that all let properties, commercial or residential, need to be B rated by 2030. If this is implemented, it will have a significant impact upon the UK market property investment market.Design/methodology/approachThis practice briefing is an overview of the 2018 legislation and comments on how market awareness has changed since its introduction and the potential impact upon prices of affected properties moving forwardFindingsThis paper discusses how capital and rental values are beginning to be discounted in the market to allow for current and future liabilities under the MEES legislation. This has a significant impact on strategies for property investment.Practical implicationsThis paper analyses the likelihood of (negative) capital and rental value changes under the proposed stricter energy efficiency guidelines.Originality/valueThis provides guidance on how valuations can be undertaken to reflect any impact of the likely changes to UK energy efficiency legislation.