Non-domestic MEES: larger buildings to reach EPC B by 2031

The UK Government has published an interim response to its 2019 and 2021 consultations on strengthening the Minimum Energy Efficiency Standards (MEES) for the non-domestic private rented sector in England and Wales. The announcement, released on 18 June 2026, confirms a targeted approach to raising energy efficiency requirements, with significant implications for commercial landlords, tenants, and real estate investors.

Key Proposals

The headline measure is that, from 2031, all privately rented non-domestic buildings over 1,000 square metres will be required to achieve an Energy Performance Certificate (EPC) rating of B, where cost-effective. Buildings below 1,000 square metres will continue to be subject to the current minimum standard of EPC E, with no commitment to raise this. 

Notably, plans for an interim milestone of EPC C by 2027 have been abandoned. The Government has stated that this is intended to give landlords and tenants additional time to plan and implement improvements in a manner that suits their buildings and lease arrangements. Existing flexibility mechanisms, including the seven-year payback test and current exemptions, will be retained, ensuring that only improvements which are practical, affordable, and cost-effective will be required.

The changes will only take effect following further legislation, which the Government has indicated it aims to introduce soon, working with stakeholders on the detail.

Practical Implications for Landlords, Tenants, and Investors

For commercial landlords of larger premises, the 2031 deadline introduces a clear compliance target. Landlords should begin assessing the current EPC ratings of their portfolios and identifying properties that may require works to reach EPC B. Consideration should also be given whether existing lease provisions adequately address MEES and other green lease issues.

Real estate investors and REITs should note the potential impact on asset valuations. Properties that fail to meet the required EPC standard by 2031 will face letting restrictions, potentially reducing income and liquidity. Conversely, buildings already meeting higher energy efficiency standards may become more attractive. 

The retention of the EPC E standard for smaller properties offers some respite to investors with high street or SME-focused portfolios, but many will question whether it is justified to introduce such a significant distinction between larger and smaller premises.

For tenants, the Government estimates the measures could save occupiers of the largest rented buildings approximately £360 million per year in energy costs by 2031, whilst also reducing exposure to volatile energy prices. 

Looking Ahead

The Government has indicated that further detail on the proposals and the implementation of the size threshold will be set out in a forthcoming full response to the consultations. Market participants should monitor this closely, as the secondary legislation and updated guidance will determine the precise scope of the new requirements.

Landlords, tenants, and investors are encouraged to take early legal and energy efficiency advice to understand the implications for their portfolios, lease structures, and investment strategies. Proactive engagement now will be key to managing compliance risk and capitalising on the opportunities that improved energy performance can bring.

from 2031, it is proposed that all private rented buildings over 1,000 square metres in England and Wales will need to reach a higher standard of energy efficiency of EPC B, where cost effective

https://www.gov.uk/government/consultations/non-domestic-private-rented-sector-minimum-energy-efficiency-standards-epc-b-implementation/outcome/minimum-energy-efficiency-standards-mees-in-the-non-domestic-private-rented-sector-interim-response