Minimum Lawful EPC Rating Must Be B by 2031 for Larger Commercial Property

In 2019 and 2021 the government held consultations where they strategized on how best to improve the Minimum Energy Efficiency Standards (MEES). Since then, on June 18^th 2026, the government has provided an interim update outlining how they intend to implement this over the coming years, pending its approval in parliament.

To improve MEES across England and Wales, the government is focusing on increasing the minimum required standard for Energy Performance Certificates (EPCs) namely targeting businesses that rent larger premises, as this is where we can derive the greatest benefit.

The Government also noted that the previously proposed EPC C milestone, set for 2027, will no longer be going forward.

New Rating of B by 2031

Instead, the government have confirmed that from 2031 they require all commercial buildings across England and Wales reach a higher standard of energy efficiency, at EPC B in order for the property to be lawfully rented.

If the property is below rating B, any letting will be void from 2031 onwards unless the landlord has registered a legitimate reason on the Exemptions Register for failing to meet this EPC standard. This change will only be applicable to buildings that span over 1000 square metres in size, and where it is cost effective for the landlord or owner to do so.

Although this initially means higher upfront costs for landlords and owners, over the long term this approach is set to have a return on investment. It is estimated that by 2031 this will allow tenants of larger buildings to save more energy and reduce their bills by up to £360 million per year.

Additionally, buildings hosting a higher EPC rating are more attractive to prospective buyers and tenants, which is another incentive for landlords and owners / sellers to streamline their systems.

In contrast, a lower EPC rating, which is likely to function less effectively and use more energy to complete the same task, can leave users more exposed and susceptible to overcharging in the event of a future energy crisis.

Buildings Below 1000 Square Metres

Meanwhile, buildings which fall below 1000 square metres in size will not be subject to this new requirement and will remain held to a minimum standard of EPC E. Notably, this supports small and medium sized enterprises which may not have the capital to upgrade their systems and equipment over this time frame, therefore, allowing them to have greater flexibility and autonomy.

Moreover, the government pledge to maintain and keep existing flexibility mechanisms such as the 7-year payback scheme and exemptions. These will remain in place to ensure that only improvements that are necessary, pragmatic and cost effective will be carried out.

Conclusion

At its core, the proposed policy positively supports business investment and the environment whilst reducing users exposure to volatile energy prices. This in turn, will allow England and Wales to strengthen its future energy security whilst benefitting its property owners.