The standards set by MEES are scheduled to tighten further, with higher minimum EPC ratings required shortly:
Minimum ‘C’ Rating for Commercial EPC in 2027
By 2027, all non-domestic rented buildings must have improved the building to an EPC rating of a ‘C’ or above, or have registered a valid exemption.
Minimum ‘B’ Rating for Commercial EPC in 2030
By 2030, all non-domestic rented buildings must have improved the building to an EPC rating of a ‘B’ or above, or have registered a valid exemption.
To comply with these evolving standards, landlords will need to invest in their properties, potentially overhauling energy systems or improving building insulation.
According to Savills, 87% of the office stock in the major UK office markets has an Energy Performance Certificate rating of “C” or below, so there is a significant amount of work needed to ensure compliance in 2027 and beyond.
As it stands today, over 50% of inner London commercial stock would be ‘unlettable’ in 2027 as MEES legislative changes loom.
On the current trajectory, over 70% of existing properties may become impossible to let. Owners of old or low-performing properties must make changes soon or risk stranded assets.
With a push to improve energy efficiency, a good EPC rating will contribute towards future purchase decisions with a better rating meaning that less work will be required to bring the property up to standard. Energy improvements will also need to be considered in relation to any leases as Landlord’s will need to continue to improve the property’s energy efficiency to ensure continued compliance with EPC legislation.