There will be a certificate required that rates the building dealing with energy management. This will have a huge impact on the business community.
The UK in 2008 will see new regulation being rolled out that will affect all commercial premises. EPCs stands for Energy Performance Certificates and will be required for rental, sale or construction of commercial property.
So each building will be given an energy rating A,B,C,D,E,F,G. Band A should have the lowest fuel bills reflected by being the most energy efficiency. For the higher rating the carbon dioxide (CO2) emissions should be lower.
It is thought that currently most UK commercial property will fall into bands D-E for both ratings. Obviously this rating will effect the businesses value on sale or rental achievable. So this will push the business owners’ to invest in better energy efficiency throughout as this money spent will be regarded as a potential return on investment. And therefore a positive business action to be undertaken.
Each EPC will last for ten years. The Department of Communities and Local Government (CLG) must measure the effects of EPCs on the business sector. Adjustment may have to be made if it has a damaging effect because of cost in a recession and the ability of the landlord to lease their property easily. This legislation will effect business premises across the range of sizes so nobody will be unaffected by this.
This policy has the added advantage of long term money savings on feul bills as that it looks like energy demand for the long term will be high due to the UK now having limited resources and the massive demand on oil in the Far East.
Business loans may be regarded as higher risk than residential lending this is due to the fact that a very high percentages of new business will not be trading after five years and even after five years many businesses cease trading. Running a business is high risk and very vulnerable to outside influences for example European regulation, red tape, competition, changing markets and channels of distribution.
A good example of this is over the last few years trading over the internet has dramatically increased and therefore has seriously adversely affected shops' trading figures. Because business is risky great care and business research should be conducted before committing to commercial finance to ensure success or reduce the risk of failure. Another example is how the large supermarkets have severely affected local shops' trade, with massive buying power and household branding.
The mortgage product would be looked at as a whole and not just on the rate or the monthly payments and chosen from the market as a whole including exclusive deals only available to mortgage advisors. This is because a short term rate can appear great at first until you look at the full package offered for example, entrance and exit costs can out strip the overall savings and an extension to the early repayment charges can have the same effect.
Future earnings, employment and location planning should also be taken into consideration along with a very long view of your savings and financial goals. Though some lenders do not offer their existing borrowers the same superior deals that they offer new business recent entrance and exit costs have generally increased so prudence must be taken in order to select a suitable product.
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