How to prepare your property business for regulatory changes in 2023
1. Check if any of your properties have an EPC rating of F or G. Then check if you can apply for any MEES exemptions and do this soon as possible. Audit any remaining non-compliant properties and look at measures to improve their higher rating. The EPC recommendation report for each building is a great source of potential improvements.
2. Make sure renovations & new builds comply. All new projects, or those with planning permission where significant work won’t begin before 2023, have sufficient measures planned to reduce their carbon emissions by 30% (domestic) or 27% (non-domestic) and comply with the new Building Regulations. These will also impact renovations on existing properties, eg. if installing new heating or air conditioning systems.
3. Review all of your contracts before works begin. Check when leases expire, which parties are responsible for the cost of improvements, if you have the required rights of access to carry out renovations under the lease terms and if any costs for EPC-increasing works can be recovered from the tenant.
4. Take stock of your assets and be strategic about selling off. If you have assets you’re planning to dispose of in the next year or so, consider bringing forward those planned sales to pre-April 2023 while corporation tax is still at the current rate. This is especially important for companies with profits exceeding £250,000.
5. Focus on improving your risk management practices. With more regulatory changes coming, you can prepare your business and your portfolio by collecting and analysing data from previous projects. For example, if you’re comparing one measure versus another or assessing potential risks on a project, you can look back at historic data to more accurately predict the potential financial and ESG impact of each decision. This helps you mitigate risks in advance and make better decisions based on accurate project data.
6. Improve data quality and transparency. The quality of your data matters – only good data can support better decisions. By digitising the property development process in software like Alasco, you can create a real-time overview of every project and budget in an accessible platform with traceable, digital workflows that include all your stakeholders. This makes generating custom reports quick and easy, whether you need one tailored for an investor, a manager or to help you secure finance for your next project through proven data.
The changes already scheduled for 2023 are unlikely to be the last, especially with the UK Green Taxonomy on its way. Take these steps to protect your portfolio and put your business in the best position to adapt to new regulations, no matter what comes next.