UK Government revises MEES proposals for commercial properties: a more targeted path to the B band of an EPC Asset Rating

On 18th June 2026, the UK Government published its interim response to the 2019 and 2021 consultations on strengthening the Minimum Energy Efficiency Standard (MEES) for the non-domestic private rented sector in England and Wales. The response confirms a revised approach to improving the energy performance of commercial buildings, balancing the UK’s net zero ambitions with the practical challenges faced by landlords and businesses.

The revised proposals adopt a more proportionate approach than originally proposed, concentrating higher energy efficiency requirements on larger commercial properties while limiting additional regulatory obligations for smaller premises. In doing so, the Government aims to improve the energy performance of the commercial building stock while balancing environmental objectives with the practical and financial considerations facing landlords and businesses.

A revised approach to commercial MEES

Under the revised proposals, privately rented non-domestic buildings with a floor area exceeding 1,000 square metres will be required to achieve a minimum Energy Performance Certificate (EPC) asset rating of B from 2031, where improvements are cost-effective. Smaller rented commercial properties, those below 1,000 square metres, will continue to be subject to the current minimum EPC E requirement.

Importantly, the Government has decided not to proceed with the previously proposed interim EPC C milestone for 2027. This change is intended to provide landlords and tenants with additional time to plan and implement energy efficiency improvements that are appropriate for their buildings and lease arrangements. The proposed reforms will be introduced through secondary legislation and will require Parliamentary approval before taking effect.

Retaining flexibility for landlords

The Government has confirmed that the existing flexibility mechanisms under the MEES regime will remain in place. In particular, landlords will continue to benefit from the current seven-year payback test and the established exemptions framework, meaning that energy efficiency improvements will only be required where they are considered cost-effective and reasonably achievable.

By retaining these provisions, the revised proposals seek to encourage improvements in the energy performance of commercial buildings while recognising the practical, technical and financial constraints that may arise for certain properties.

Supporting larger buildings while reducing regulatory burdens

Rather than applying higher standards uniformly across the commercial property market, the Government has opted for a targeted approach focusing on larger buildings, where the greatest energy savings are expected to be achieved. According to the interim response, this approach is intended to deliver significant reductions in energy demand while avoiding disproportionate costs for smaller businesses and high street landlords.

The Government estimates that the policy could help tenants in larger commercial buildings save around £360 million annually in energy costs by 2031, while contributing to the UK’s broader decarbonisation and energy security objectives.

What it means for property owners, investors and occupiers

For commercial property owners and investors, the interim response provides long-awaited regulatory clarity after several years of consultation. Owners of larger commercial assets should begin assessing the EPC performance of their portfolios and identifying opportunities to improve building efficiency ahead of the proposed 2031 compliance date.

Although smaller commercial properties will not currently be required to achieve EPC B, market expectations around sustainability continue to evolve. Investors, lenders and occupiers are increasingly considering energy performance as part of leasing, financing and acquisition decisions, meaning that voluntary improvements may continue to enhance asset value and competitiveness.

For occupiers, improved building efficiency may translate into lower operating costs, reduced energy consumption and greater resilience against future energy price volatility.

Looking ahead

The UK Government’s interim response represents an important step in the development of the future MEES framework for the non-domestic private rented sector. By proposing a more targeted approach to raising minimum energy efficiency standards, the revised framework seeks to improve the energy performance of larger commercial buildings while recognising the practical and economic considerations associated with upgrading the existing building stock.

Although the proposals will require secondary legislation before they take effect, landlords, investors, asset managers and occupiers should begin assessing how the proposed EPC band B requirement may affect their commercial property portfolios, investment strategies and future asset management plans.