The author is Richard Griffiths, Senior Policy and Campaigns Consultant at the UK Green Building Council.
Late last week we received confirmation that the long-awaited Minimum Energy Efficiency Standards (MEES) regulations – which, from 2018, will make it illegal to let the most inefficient buildings – have finally been passed into law. Quite surprisingly, this is something that has happened with relatively little attention from the press fanfare. As our Director of Policy when the draft regulations were introduced into Parliament, they represent perhaps “the most significant piece of legislation to affect our existing building stock in a generation.”
There is no escaping that the final regulations have their issues. Both the domestic and non-domestic provisions are tied to a Green Deal “Pay as You Save” scheme that is unpopular at best (for homes) and non-existent at worst (for commercial buildings). There is no trajectory, which means that landlords in both sectors have been denied the certainty they would ideally have on the future direction of the scheme, and the associated possibility of more ambitious retrofit action has been – at least partially – lost. More generally, there are some concerns that the precise meaning of the regulations is, in places, unclear, and requires Government to urgently produce guidance to remove the uncertainty that might otherwise inhibit or confuse those looking to comply.
But, despite all those issues, we should not lose sight of the fact that these regulation mean that for the first time, landords will be breaking the law if they let inefficient buildings. That is an astonishing fact, and one that would have been almost unimaginable back when the UK Green Building Council was born eight years ago. In fact, it deserves repeating: from 2018 it will be illegal to let F and G-rated buildings.
It will be absolutely fascinating to see the effect that the regulations have on the market. There will undoubtedly be many organisations that seek to evade the regulations and exploit their loopholes. But there will also be a significant number who rise to and exceed the challenge. Many of our members have been reporting for some time that the mere prospect of the regulations has been affecting the market: leading portfolio owners to examine and improve their stock, and those engaged in transactions to negotiate on price.
The latter is vitally important. The holy grail of energy efficiency is to reach a point where energy efficiency genuinely starts to impact on property value. While there is some evidence that this is a process that is already underway, these regulations bring with them the prospect of a significant acceleration. A long-standing barrier to that happening has been the chicken-and-egg issue of valuers looking to the market for evidence of energy efficiency driving value, and the market in turn looking to valuers for leadership. If, as a result of MEES, F and G buildings start to attract a “brown discount” or those at E or above a “green premium”, then we will see that cycle broken and a new, strong driver for retrofit created.
If successful in achieving their aims, the regulations will create jobs, reduce energy demand and improve our energy security. At the same time, they will cut our emissions in a way that will vastly improve our chances of meeting our legally binding carbon budgets, and reduce fuel poverty in some of the UK’s poorest homes. Yet this is not the end of what they could achieve. Beyond the UK’s shores, Governments are watching to see if this ground-breaking legislation works, and the lessons they can learn for their own prospective schemes or future policy development.
So while there is much to be done to ensure that MEES are properly implemented, enforced and strengthened over time, it’s worth taking a moment to celebrate and enjoy the moment. After what has been a mixed few years for green building issues in the UK, the passing of this legislation brings with it welcome cause for optimism for the future.