It is clear from member sentiment, that economic uncertainty, and interest rates in particular, are continuing to weigh on the commercial property market. Supply and demand imbalances continue in key sectors, suggesting that there will be a challenging start to 2024.

NAEA Commercial Advisory Panel and Propertymark Board member Michael Sears, MNAEA MARLA MNAEA (Comm) MNAVA HIDip Ndea, has cautioned against complacency when it comes to commercial buildings insurance to avoid the frustration of claims being invalidated.

The UK Government’s detailed proposals for the 2025 Future Homes and Buildings Standards will amend existing legislation to set new minimum energy efficiency requirements for buildings in England. Most changes will apply to new homes and non-domestic buildings and should ensure no further work will be needed for new buildings to produce zero carbon emissions as the electricity grid decarbonises.

There are approximately 350,000 listed homes in England, and approximately 600,000 commercial properties dating from before 1919. The impact of the cost-of-living challenges means fewer households and businesses can afford the required work to install energy efficiency upgrades. This, in combination with increased costs for historic building retrofit skills and materials, makes comprehensive retrofit action unobtainable for many property owners.

The Secretary of State for Energy Security and Net Zero, the Rt Hon Claire Coutinho, MP, responded to our call for certainty and confirmed that no changes have yet been made to Minimum Energy Efficiency Standards (MEES) for non-domestic properties. However, she acknowledged it is essential that the UK Government reviews their policy design and timelines to ensure they are still fair and reasonable.

The base rate was held in September, GDP is growing slowly, the construction materials price index is decreasing, and Propertymark Commercial agent sentiment is increasing in several key areas. However, economic uncertainty remains and improvements in sentiment are generally from a low base.

School closures made headlines over the summer of 2023, but these are not the only buildings that could be affected by structural issues because of old or badly maintained materials. Property agents need to understand key facts relating to domestic and commercial buildings, especially those who deal with leaseholds.

Section 156 of the Building Safety Act 2022 took effect on 1 October 2023, which means that all businesses in England must document their fire risk assessments and fire safety arrangements. The revised legislation also requires that in residential buildings housing two or more domestic premises, residents must receive information about fire risks and the fire safety measures put in place for their protection.

Following a call for evidence that received over 17,500 responses, widespread concerns were highlighted that women and older people are disadvantaged by the increasing number of non-specific gender public toilets.

The All-Party Parliamentary Groups (APPGs) for Ending Homelessness and Housing Market and Housing Delivery has produced a report on Rethinking Commercial to Residential Conversions following an inquiry to explore the potential challenges during planning to occupation.

The Department for Levelling Up, Housing and Communities has opened a consultation to change the Town and Country Planning (General Permitted Development) (England) Order 2015 that allows for the change of use to dwelling houses.

Responding to the Department for Levelling Up, Housing and Communities (DLUHC) consultation on High Street Rental Auctions (HSRA), Propertymark states empty properties can become magnets for anti-social behaviour and vandalism, impact a location’s economic performance as well as impact positive footfall risking the viability of other businesses nearby resulting in threats to job opportunities.

The commercial property market has seen a sluggish start to 2023. Since the Kwarteng budget of September 2022, the market has been subdued. And while we have continued to see small gains in capital values, there seems little drive in the market from investors at present. These patterns are clearly reflected in our latest Commercial Outlook.

A new Non-Domestic Rating Bill has been introduced to incentivise property improvements and support more frequent revaluations to deliver reforms in the commercial sector.

NAEA Propertymark Commercial agents reported a more positive outlook for many sectors compared to last quarter. Better than anticipated performance of the UK economy and resettling after the Truss/Kwarteng budget have resulted in improved expectations.