Survo Chartered Surveyors Insights

October 2026

Survo Insights

Rebuild costs, renewals and energy ratings: what's changing

Welcome to this month's edition.

If your building had to be rebuilt tomorrow, would your insurance cover it? With construction costs up sharply in recent years, many landlords are underinsured without realising it, and it's the everyday claims, not just the disasters, where it shows.

Below, we look at why reinstatement cost assessments matter more than ever, how the Law Commission's proposals could reshape lease renewals, and what the new energy standards and landlord register mean for you.

Building Surveying

Underinsured? Why Reinstatement Cost Assessments Matter More Than Ever

For landlords, adequate buildings insurance is a fundamental part of good asset management. Yet the figure it rests on, the Reinstatement Cost Assessment (RCA), is often overlooked.

An RCA estimates the cost of rebuilding a property after a total loss. It is not the same as market value, and the two can differ significantly. A proper RCA reflects the building's floor area, construction, specification, site constraints and external works. It also includes demolition, debris removal, professional and statutory fees, inflation and VAT where applicable.

The risk is growing. Construction costs have risen sharply in recent years, and historic figures, index-linked values or informal estimates may no longer reflect the true cost of rebuilding. This is particularly so where a building has been altered, extended or refurbished.

Best practice is an annual desktop update to reflect cost inflation, with a full reassessment every few years or after any material change to the property.

An RCA is a small investment compared with the cost of being underinsured. If your assessment hasn't been reviewed recently, our team can help.

2/3

of UK commercial properties are underinsured

40%

average shortfall in cover where underinsured

16.6%

rise in UK construction tender prices since 2022

What this means in practice

•

Check when your building's reinstatement cost was last professionally assessed.

•

Arrange a full RCA if it's been more than three years, or the building has been altered or extended.

•

Speak to our team before your next insurance renewal if you're unsure.

Worth knowing

If a building is insured for less than its true rebuild cost, the insurer can reduce partial claims in proportion to the shortfall, not just cap a total loss at the sum insured.

For example, a building insured for £600,000 that would cost £1m to rebuild is 60% insured. A £100,000 claim for fire or flood damage could therefore be settled at just £60,000.

Landlord & Tenant

Modernising the 1954 Act: What the Law Commission's proposals mean for business leases

The Law Commission's consultation on reforming Part II of the Landlord and Tenant Act 1954 (LTA 1954) closed on 16th September 2026. Although the concept of 'Security of Tenure' is to remain, the way business leases are contracted out, renewed and ended could change significantly.

Leases granted today...may well be renewed under a new regime.

The key proposals:

•

Contracting out within the lease: The warning notice and declaration would be replaced by prescribed wording contained in the lease itself.

•

Fewer short lettings protected: The 6-month threshold would rise to one or two years, and new periodic tenancies would be excluded.

•

Redevelopment and own occupation: Ground (f) under Section 30(1) of the LTA 1954 could be modernised or replaced with a single "substantial works" test, and Ground (g) may let landlords carry out alterations before occupying.

•

Simpler interim rent: The possibility of a single valuation date, with the renewal lease backdated to it.

•

Compensation and renewal terms: Compensation may be based on rent rather than Rateable Value, and the Court may gain power to order turnover rents.

What it means now

Nothing changes yet. The current Act, notices and time limits apply in full, and the Commission's final report has no date. Leases granted today, however, may well be renewed under a new regime.

The 1954 Act is also changing from another direction. The upward-only rent review ban covered in our May newsletter, which still awaits commencement, will sit alongside any reformed renewal regime.

If you have a lease expiring in the next 18 months, our Lease Consultancy team would be happy to advise.

Property Management

Energy ratings and the new landlord register: what's changing and when

The minimum energy rating a property needs before it can be let, known as the Minimum Energy Efficiency Standards or "MEES", is set to rise, and residential landlords face a new registration requirement rolling out from December. Here's where things stand.

Commercial property

In June, the government confirmed that from 2031, privately rented non-domestic buildings over 1,000 sq m will need an EPC rating of at least B, where cost-effective. The planned interim step to EPC C by 2027 has been dropped, and buildings under 1,000 sq m stay at EPC E with no set deadline to go further.

This is an interim response. The detail, including transitional arrangements and how buildings will be measured, is still to come, and the changes need secondary legislation before they take effect.

Residential property

Privately rented homes in England and Wales must reach EPC C by 1 October 2030. Landlords will be expected to spend up to £10,000 per property, with a lower cap for homes worth under £100,000, and fines will rise to up to £30,000 per property, per breach.

Separately, the new national landlord register, the "Register your rental property" service, opens on 15 December 2026, starting in the West Midlands and rolling out region by region across England. All private landlords in England must be registered by 14 November 2027, at £65 per property per year.

Using a managing agent doesn't remove the duty to register. The legal obligation sits with the landlord, and agents can only register on a landlord's behalf in limited circumstances. Your agent can, however, help gather the property information and documents you'll need.

Why it matters now

The deadlines may feel distant, but the cheapest time to improve a building is when work is already planned. A roof, boiler or lighting replacement brought forward or specified properly today can avoid a costly retrofit later.

Dates to act on

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15 December 2026: the landlord register opens. Residential landlords must register themselves, even if they use a managing agent.

•

Before your next insurance renewal: check when your reinstatement cost was last professionally assessed.

•

Lease expiring in the next 18 months? Speak to us before serving or responding to any notice under the 1954 Act.

Before you go

Looking ahead

Rebuild costs, lease renewals and energy ratings are all shifting, and the landlords who plan ahead will have more options and lower costs than those who wait.

Next month, we'll be watching for the government's full response on commercial energy ratings, expected later this year, and the launch of the landlord register on 15 December.

As always, if anything in this edition raises a question about your property, please get in touch. We're happy to help.

With best wishes,

The Survo Team

Survo Chartered Surveyors

195 Bury Old Road, Prestwich, Manchester, M25 1JF
0161 792 5050

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