We’re most of the way through the comprehensive refurbishment of two freehold Victorian residential blocks in Marylebone. We acquired 61-130 Miles Buildings with our joint venture partner in 2022. The blocks comprise 70, mainly one-bedroom apartments, many of which were in poor condition. We have stripped out the apartments and completely refurbished them so we can bring them to market to let. We have also completely refurbished the common areas and outside space, creating an attractive courtyard for our residents. Along the way we’ve tackled, amongst other things, the practical challenges of improving fire safety and energy performance during the refurbishment…. all while meeting a budget.
Here are some of the lessons we have learnt:
- As the regulatory hurdles have increased over the past five years, the gap between current Building Standards and older pre-1945 buildings, has become extremely wide. Since many of these same standards are not retrospective, both new and old can be compliant, with both being judged against different yardsticks. The extent of the ‘gap’ is exposed when old buildings are subjected to a major refurbishment, but are caught by modern standards being applied to the old building.
- In our experience, many consultants are more familiar and comfortable advising on new developments with tried and tested Building Standards, and struggle to apply their knowledge to the pragmatism required when it comes to improving old buildings. Each of these projects is to some extent bespoke and applying a standard template to specification and design is not appropriate.
- We ran a series of fortnightly design workshops over six months, with all the specialist consultants and our contractor, and thrashed out an optimum solution to meeting our objectives. Most of the consultants wanted to adhere to new build ‘best practice’, but in many cases this wasn’t appropriate or required. We were starting with an imperfect building where perfection was the enemy of the good, and they were reluctant to adapt. This was probably the most important lesson to learn. The workshops, however, were successful and I really felt we ended up with bespoke optimal solutions with everyone contributing.
- The importance of the mantra ‘fabric first’ when it comes to improving SAPS rating and ultimately reducing energy consumption has been another important lesson. At first, we resisted, due to concerns with cost and loss of space, However, on further investigation we discovered that in our block of apartments it was cost effective. Firstly, it only relates to the external facing walls which usually means only one or two walls in each apartment are affected. Secondly, the external facing walls are usually reduced by the windows and so the area needed to be insulated is relatively small. Lastly, under current rules the costs of installing insulation are zero rated for VAT, which resulted in savings that effectively subsidised the installation and had a real impact on both SAPS scores and cost to heat. This might sound obvious in hindsight, but it didn’t seem so obvious at the time.
- We were faced with an unexpected conflict between wanting to remove any reliance on fossil fuels for heating and wanting to achieve a strong SAPS rating and EPC. We wanted to remove the gas boilers and replace with electric heating on the basis that the grid is decarbonising. Ironically the effect was to lower our EPC while achieving an Environmental Impact rating of A. The former is scored based on cost to heat and the latter on reducing carbon emissions.
- Old blocks of apartments in built up urban areas can impose physical constraints limiting the options of sustainable energy solutions and because there’s no ‘reward’, in the way SAPS calculations work, for repurposing or refurbishing existing buildings versus demolition, the rules conflict with common sense.
- There are material economic consequences to this disjointed regulatory and policy context. The VAT rules helpfully zero rate energy saving materials, but because removal of gas boilers and replacing with electric heating is not regarded as ‘energy saving’ it doesn’t qualify – so landlords are incentivised to keep the gas heating.
- Government policies appear to be heavily biased towards building new homes and not encouraging investment in our old housing stock. Roughly 60% of our 27 million homes in the UK are more than 40 years old. Policies/regulations/taxes should also cater to old buildings and incentivise owners to invest in upgrades that make our housing safer, more sustainable and cheaper to heat.
At Miles Buildings we’ve been fortunate to have a very supportive JV partner who has shared our priorities and we’ve benefited from a strong rental market. We are now leasing up the first phases of the modernised apartments, the environment and apartments are transformed, and we have nearly doubled the rents.
Written by Matthew Allen. This article first appeared in BE News in June 2025.
