As the UK edges closer to its 2050 net zero target, the pressure on the property sector to cut carbon is becoming impossible to ignore. Many older commercial buildings account for a significant chunk of national emissions, and with regulatory standards tightening, landlords and developers are being pushed to act.
For many, the solution lies not in sweeping demolition but in adapting what already stands. Instead, two possible strategies are coming to the fore – retrofitting and airspace development. Each brings its own challenges, but together they’re forming a blueprint for delivering lower-carbon, higher-performing commercial buildings.
Decarbonisation
Heating, lighting, and maintaining buildings uses up huge amounts of energy. In fact, the built environment is responsible for nearly 40% of the UK’s carbon emissions. That’s why the government, and increasingly the commercial property market, is focused on change.
Landlords, in particular, are feeling the squeeze. Since April 2023, it’s been unlawful to let non-domestic properties in England and Wales with an EPC rating lower than E. And it doesn’t stop there. The government has signalled that a minimum B rating is likely to be required by 2030. Falling short could mean loss of rental income, asset devaluation, or reputational risk.
Retrofitting
With retrofitting, you are essentially upgrading existing buildings to make them more energy efficient. This can be achieved though a number of methods, which could include improving insulation, replacing gas boilers with heat pumps, fitting new glazing, or installing solar panels. Implementing such changes can dramatically reduce a building’s operational energy use and help it meet future compliance thresholds.
However, it’s rarely a simple fix. Older buildings often come with quirks, such as awkward layouts, listed status, or shared ownership structures – all which make retrofitting technically or legally complex. Add in the cost (and the disruption for tenants), and it’s clear why some owners delay action.
From a legal point of view, retrofitting may trigger planning obligations, or require consent under restrictive covenants or leases. Landlords also need to be sure that service charge provisions allow for the recovery of retrofit costs where relevant. These details matter, and overlooking them can stall a project before it begins.
Airspace Development
Rooftop or ‘Airspace’ development describes the act of adding new floors on top of existing buildings. Whilst this naturally bolsters an existing building’s capacity and can help landlords, developers and investors to get maximum value out of the space, it is also increasingly being used as a tool for funding sustainability upgrades to the rest of building too. The logic is quite simple – if you’re already doing structural work to improve overall asset value, why not bring the rest of the building up to modern environmental standards so they meet ESG expectations at the same time? These schemes often combine rooftop extensions with the green retrofits we’ve already mentioned.
But airspace projects are legally intricate. Developers need to confirm who owns the airspace (not always straightforward in a leasehold block), navigate party wall rights, and deal with any affected neighbours. If planning permission is required, which it often is, sustainability measures may also need to be factored into the planning application itself.
Refit or rebuild?
There’s been growing debate over whether it’s better to retrofit old buildings or knock them down and start again. From a carbon perspective, the answer is increasingly leaning toward refurbishment. Demolishing and rebuilding generates vast amounts of “embodied carbon” – the emissions linked to making and transporting materials, not just running the finished building.
As such some local authorities, particularly those in London, are beginning to scrutinise demolition plans more closely. Why tear a building down, if it can be improved? In many cases, a retrofit-plus-airspace approach offers a middle ground – you retain the existing structure, improve its performance, and gain additional value from building upwards.
Legal considerations
Whether you’re looking at retrofitting, building into the airspace, or both, the legal side of decarbonisation is vital. Key areas to address include:
- Title and ownership: Do you own the airspace and structure you want to upgrade?
- Lease terms and service charges: Can retrofit costs be passed on, and do tenant alterations need consent?
- Planning and building regs: Do energy improvements trigger extra obligations?
- Neighbouring rights: Particularly rights of light and party wall matters.
- Funding and tax: Are there capital allowances or incentives available?
Handled properly, such decarbonisation work doesn’t just tick a regulatory box, it can also extend the life of a building, enhance its value, and meet the growing demand for low-carbon space from occupiers, investors and funders alike.
A changing landscape
The direction of travel is clear: the market is shifting towards greener buildings. For commercial property owners, retrofitting and airspace development offer a practical route to get there, provided the legal groundwork is done early.
At Buckles, we help clients balance environmental goals with commercial realities. Whether you’re rethinking an ageing asset or planning a rooftop scheme with sustainability in mind, we can support you through the legal, planning and transactional challenges that come with decarbonisation.
