If recent proposals are put into effect, by 2030 every commercial building across England and Wales will be expected to have an Energy Performance Certificate (EPC) rating of at least B, otherwise it cannot be legally rented out.
The government’s response to a consultation on the 2018 Minimum Energy Efficiency Standards (MEES) for Non-Domestic Buildings was expected earlier this year (2025), but is still awaited. The proposals include raising the existing minimum Energy Performance Certificate (EPC) rating for commercial properties.
When the changes come into effect, commercial properties will be expected to be significantly more energy efficient. Non-compliance can lead to hefty fines.
Commercial property owners should, if they are not already doing so, consider how they can increase their properties’ efficiency to meet the expected targets.
According to recent official statistics, buildings account for around 20% of the UK’s total greenhouse gas emissions, with many commercial premises still inefficient. The British Property Federation warned last year that 84% of commercial spaces with EPC ratings do not reach minimum energy efficiency targets. There’s much work to be done.
EPC rating
An EPC report is a legal requirement when leasing domestic or non-domestic properties. It states the rating of a property’s energy efficiency on a scale of A (highest) to G.
Under the existing MEES framework, landlords are prohibited from letting commercial properties with the lowest energy ratings (F or G), unless a valid exemption is available.
A valid exemption reflects the fact that not all properties can reasonably be expected to meet the minimum EPC standard. Some buildings are automatically exempt, including religious buildings, non-residential agricultural buildings and eligible holiday accommodation.
Contact us for specialist advice if you are unsure if your premises are exempt.
What’s expected?
While the government has not yet confirmed the changes, it is likely that we fully expect the following will be implemented:
- By 2027, every existing commercial building must have an EPC rating of at least C before it can be rented out (except for properties leased for more than 99 years or fewer than 6 months)
- New tenancies that start in 2028 will also be subject to the increased rating of C
- By 2030, commercial buildings might be required to have an EPC rating of at least B (as recommended by the net Zero Review). However, it is a possibility that the 2030 deadline for a B rating will be pushed back to as late as 2035 to give more time for commercial landlords comply.
Commercial landlords need to consider how the changes will affect their existing property portfolio and the financial cost of ensuring their properties are energy efficient to the expected level. Serious non-compliance with the rules could result in a fine (up to £15,000 per breach). Furthermore, details of breaches may be entered onto the PRS Exemptions Register.
What does this mean for landlords?
You need to think about of what action you may need to take. Effective practical steps a landlord could take could be as simple as replacing old windows, installing installation, double glazing, an energy-efficient boiler, solar panels and heat pumps.
Note that alongside the MEES, part L of the Building Regulations expects commercial landlords to move towards low-carbon heat sources and energy from renewable sources.
A sensible first step may be to commission an updated EPC, depending on the year in which your existing EPC was issued. If a new EPC gives a higher rating, you could significantly reduce the costs of property improvements.
Contact us
For specialist advice from experienced commercial property solicitors, please get in touch with Phil Hutsby-Hunt on 0121 2367388 or email him at phil.hutsby-hunt@mfgsolicitors.com.