Commercial property landlords have been in limbo for over five years as to whether and when the current MEES requirement of an EPC E rating would be increased. Meanwhile, they learnt from the Warm Homes Plan that residential properties in the PRS must have an EPC C rating by October 2030.
What has changed?
Today, on 18 June 2026, the Government announced that, from 2031, landlords must obtain an EPC rating of B for let commercial properties of 1,000 square metres in England and Wales. Secondary legislation will be required to implement this change.
What stays the same?
- Smaller buildings of under 1,000 square metres will continue to be subject to the current minimum standard of EPC E. The idea here is to give landlords of smaller properties time to upgrade their buildings without the pressure of a deadline.
- The 7-year payback test will stay in place, meaning landlords can still legally let their properties below the required EPC rating if the energy savings over a 7-year period do not cover the cost of purchasing and installing the recommended improvements. This will need to be recorded on the exemptions register along with supporting documentation.
- A range of other exemptions (discussed here) will still be available for landlords to register if applicable.
Conclusion
The announcement has been broadly welcomed by the real estate sector– for example, the UK Green Buildings Council stated that it "gives the market clear direction and recognises the importance of better building performance for both landlords and occupiers."
The Government has stated that it will shortly publish a full consultation response (setting out further detail on the new policy and its implementation) as well as the necessary legislation and supporting guidance.
Landlords will be keen to understand how the new threshold will be implemented, and to get answers to various questions including:
- whether there will be a transitional period for existing EPCs.
- As discussed here, the Government's partial response to its 2024 consultation about reforming EPCs, published in March this year, indicated that although EPCs for domestic properties will be reformed to use four headline metrics (fabric performance, heating system, smart readiness and energy costs), the carbon metric will remain the single headline metric for EPCs of non-domestic properties –is this still intended to be the case?
Landlords of commercial properties now have five years to understand the new requirements and upgrade their properties accordingly.
