MEES Phase 2
The Government has now provided the commercial property sector with much-needed clarity on the future direction of Minimum Energy Efficiency Standards (MEES). Under its interim response to the recent consultation, privately rented non-domestic buildings larger than 1,000m² in England and Wales are expected to achieve an EPC rating of B by 2031, provided the required improvements are considered cost-effective.
While the proposals must still progress through secondary legislation before becoming law, they establish a clear direction of travel for landlords, investors, property managers and occupiers. Importantly, the Government has also confirmed that the previously proposed EPC C milestone in 2027 will not be introduced, giving organisations more time to prepare.
For businesses responsible for larger commercial buildings, the message is becoming increasingly clear. Although 2031 may appear several years away, understanding your property’s current EPC performance and planning improvements early is likely to provide greater flexibility, lower long-term costs and fewer compliance challenges.
Contact an ExpertWhat The Government Has Confirmed About MEES Phase 2
The Government’s interim response outlines several important changes for the commercial property sector.
The key proposals include:
- Commercial buildings over 1,000m² will be expected to achieve EPC B by 2031, where improvements are cost-effective.
- Buildings below 1,000m² remain subject to the current minimum EPC rating of E.
- The proposed EPC C requirement for 2027 has been removed.
- Existing exemptions, including the seven-year payback test, are expected to remain.
- The Government estimates the proposals could save commercial tenants up to £360 million per year in energy costs by 2031.
Although further legislation is required before these proposals become law, they provide the certainty many commercial property owners have been waiting for.
The full Government interim response can be viewed here:
What This Means In Simple Terms
For landlords and organisations responsible for larger commercial buildings, the proposed direction is straightforward.
If your privately rented commercial building is larger than 1,000m², you should begin working towards an EPC rating of B by 2031.
While the legislation is not yet finalised, waiting until the last few years before implementation could significantly reduce the options available to improve your building efficiently and cost-effectively.
The earlier you understand your current EPC position, the more opportunity you have to plan improvements around refurbishment programmes, lease events and planned maintenance rather than reacting under time pressure.
Why The Removal Of EPC C In 2027 Matters
One of the most significant announcements within the Government’s response is the decision not to introduce the previously proposed EPC C milestone in 2027.
This is welcome news for many commercial landlords.
Under earlier proposals, many buildings would have required two separate rounds of improvement works within only a few years:
Removing the interim target allows organisations to develop a single, longer-term improvement strategy instead of rushing multiple compliance projects.
It also allows larger investment decisions to align more naturally with existing maintenance programmes, refurbishment cycles and capital expenditure planning.
Which Commercial Buildings Are Likely To Be Affected?
The proposals focus specifically on privately rented non-domestic buildings larger than 1,000m².
Depending on ownership arrangements, this could include:
- Large office buildings
- Corporate headquarters
- Shopping centres
- Retail parks
- Supermarkets
- Warehouses
- Distribution centres
- Industrial facilities
- Hotels
- Leisure complexes
- Hospitals operated within qualifying tenancy arrangements
- Large educational facilities
- Multi-site commercial portfolios
Many of these buildings currently hold EPC ratings below B, meaning owners may need to consider significant improvement programmes over the coming years.
Buildings Under 1,000m² Are Not Included… For Now
Smaller commercial properties are not currently included within the proposed EPC B requirement.
Instead, they remain subject to today’s minimum EPC E standard where MEES applies.
However, this should not be interpreted as meaning energy performance has become less important.
Even where legislation does not currently require EPC B, stronger EPC ratings can still provide commercial advantages by:
- Reducing energy consumption.
- Lowering operational costs.
- Supporting sustainability objectives.
- Improving attractiveness to prospective tenants.
- Protecting long-term asset value.
- Supporting future refinancing and investment decisions.
Many landlords may therefore choose to improve buildings voluntarily rather than waiting for future policy changes.
Why EPC B Is A More Demanding Standard Than Many Owners Realise
Moving from an EPC E to an EPC B represents a significant improvement for many commercial properties.
While some newer buildings may already perform well, older offices, industrial buildings and retail premises often require a combination of improvements rather than a single upgrade.
Achieving EPC B may involve improvements to:
- Building insulation.
- Heating systems.
- Cooling systems.
- Ventilation.
- Lighting.
- Building controls.
- Glazing.
- Energy management systems.
Every building performs differently.
A measure that significantly improves one property’s EPC rating may have relatively little effect on another, which is why professional assessment becomes increasingly valuable before committing to major investment.
Improving An EPC Rating Usually Requires A Combination Of Measures
Many owners understandably ask what improvements will actually be needed to reach EPC B.
The answer depends entirely on the building itself.
Rather than relying on one major upgrade, many commercial buildings achieve better EPC performance through several coordinated improvements working together.
These could include:
- Upgrading fluorescent lighting to modern LED systems.
- Improving roof, wall or floor insulation where practical.
- Installing more efficient heating equipment.
- Replacing ageing air conditioning systems.
- Improving building management controls.
- Upgrading glazing where appropriate.
- Reducing unnecessary heat loss.
- Optimising ventilation systems.
Professional EPC modelling helps identify which improvements are likely to deliver the greatest impact before significant expenditure is committed.
Why EPC B Will Influence Commercial Property Decisions Long Before 2031
Although the proposed compliance date is still several years away, its influence is already beginning to shape commercial property decisions.
Increasingly, EPC performance is becoming an important consideration during acquisitions, refinancing, lease negotiations and long-term asset management.
Investors are paying closer attention to future compliance costs. Lenders are increasingly interested in environmental performance. Occupiers are becoming more focused on running costs, sustainability commitments and the quality of the buildings they lease.
For anyone purchasing commercial property today, understanding the likely cost of improving a building from an EPC D, E, F or G to an EPC B could become an important part of due diligence.
Similarly, owners considering disposal may find that stronger EPC ratings improve marketability by reducing future compliance uncertainty for purchasers.
Rather than viewing EPC B solely as a regulatory requirement, many organisations are beginning to see energy performance as part of wider investment and portfolio management strategies.
A Strategic Approach Can Help Spread Costs Over Time
One advantage of the 2031 timetable is the opportunity to integrate improvements into existing maintenance and refurbishment programmes.
Instead of carrying out multiple upgrades immediately before the deadline, many landlords may choose to phase works alongside:
- Planned HVAC replacement.
- Lighting upgrades.
- Roof refurbishment.
- Building fabric improvements.
- Lease renewals.
- Vacant possession periods.
- Major refurbishment projects.
This approach can reduce disruption for tenants while allowing investment to be spread across several years rather than concentrated into a single compliance programme.
For organisations managing multiple commercial properties, prioritising buildings according to current EPC ratings, lease events and improvement potential can also help direct budgets where they will have the greatest impact.
The Seven-Year Payback Test Remains An Important Safeguard
One aspect of the proposals that has remained unchanged is the continued use of the seven-year payback test.
This principle is designed to ensure landlords are only expected to carry out energy efficiency improvements where the investment is considered economically reasonable.
Put simply, if recommended improvements are not expected to recover their cost through energy savings within seven years, they may not be required under the regulations.
This recognises that some commercial buildings, particularly older or more complex properties, may face practical limitations when attempting to achieve higher EPC ratings.
However, relying on this provision is not automatic.
Property owners should still ensure they have appropriate evidence, professional assessments and supporting documentation where exemptions or cost-effectiveness are being considered.
Why Waiting Until 2030 Could Become Expensive
Although the proposed deadline appears comfortably distant, many organisations will be competing for similar resources as the implementation date approaches.
Commercial EPC assessments, specialist energy modelling, mechanical and electrical contractors, refurbishment programmes and skilled consultants are all likely to experience increased demand as more property owners begin preparing.
Organisations that delay planning may therefore face:
- Longer lead times.
- Reduced contractor availability.
- Increased project costs.
- Greater disruption to tenants.
- More limited upgrade options.
- Pressure to complete multiple projects simultaneously.
By contrast, organisations that begin planning earlier are often able to spread investment over several years while integrating improvements into planned maintenance programmes.
What Property Owners Should Be Doing Now
Even though secondary legislation is still required, there are several practical steps commercial property owners can take today.
These include:
Review Existing EPC Certificates
Understand the current EPC rating for every commercial building within your portfolio and check when certificates expire.
Identify Higher-Risk Buildings
Buildings currently rated D, E, F or G may require more detailed investigation to understand what improvements could be necessary.
Review Existing Building Information
Gather available information relating to heating systems, lighting upgrades, insulation, glazing and previous refurbishment works.
Accurate documentation can often improve the quality of future EPC assessments.
Consider Future Investment Cycles
Where refurbishment projects or major plant replacement are already planned, these may provide opportunities to improve energy performance more cost-effectively.
Develop A Long-Term Compliance Strategy
Rather than treating each building individually, portfolio owners may benefit from creating a phased programme that prioritises buildings according to lease events, investment priorities and operational requirements.
Common Mistakes Commercial Landlords Should Avoid
Assuming An Existing EPC Still Reflects The Building
Many commercial buildings have undergone improvements since their last EPC assessment.
Lighting upgrades, replacement HVAC systems or building refurbishments may not be reflected if the EPC is several years old.
Leaving Everything Until The Final Years
Although legislation is still progressing, waiting until closer to 2031 reduces flexibility and may increase overall compliance costs.
Early planning generally provides more options.
Investing In Improvements Without EPC Guidance
Not every energy efficiency measure has the same impact on an EPC rating.
Professional modelling helps identify which improvements are likely to deliver the greatest benefit before major expenditure is committed.
Overlooking Documentation
Commercial EPC assessments rely heavily on available evidence.
Missing information regarding insulation, glazing specifications, building services or previous improvement works can result in less favourable assumptions being applied during assessment.
Assuming Exemptions Apply Automatically
Where exemptions are available, they must normally be supported by appropriate evidence and registered correctly where required.
Professional advice helps ensure the correct process is followed.
Looking Beyond Compliance
Although the headlines naturally focus on regulation, improving energy performance can deliver wider commercial benefits.
For many organisations, a stronger EPC rating may contribute towards:
- Lower operational energy costs.
- Improved environmental performance.
- Reduced carbon emissions.
- Greater appeal to prospective tenants.
- Enhanced corporate sustainability reporting.
- Improved long-term asset resilience.
- Better positioning for future regulatory changes.
As energy performance becomes an increasingly important consideration across the commercial property market, proactive planning can support both compliance and broader business objectives.
How EPC-HUB Supports Commercial Property Owners
At EPC-HUB, we understand that achieving compliance involves much more than producing an Energy Performance Certificate.
Our role is to help clients understand their current position, identify practical opportunities for improvement and develop realistic strategies that reflect both today’s regulations and future legislative changes.
Alongside accredited Commercial EPC Assessments, we also support clients with:
As a family-run business specialising exclusively in commercial property compliance, we pride ourselves on delivering responsive service, reliable advice and practical solutions tailored to each client’s circumstances. These values underpin EPC-HUB’s focus on commercial EPCs and MEES consultancy across the UK.
Frequently Asked Questions
No. The Government has published its interim response confirming the intended direction of travel, but the proposals must still progress through secondary legislation before becoming law.
No.
The proposed EPC B requirement currently applies to privately rented non-domestic buildings larger than 1,000m² in England and Wales where improvements are considered cost-effective.
Buildings below this threshold remain subject to the current minimum EPC E requirement.
Following consultation, the Government decided not to proceed with the interim EPC C milestone.
This gives landlords additional time to plan improvements through a single programme rather than completing two rounds of upgrades within a short period.
Potentially.
Existing exemptions, including the seven-year payback test, are expected to continue. However, exemptions require appropriate evidence and should not be assumed automatically.
For many organisations, waiting may reduce flexibility.
Understanding your current EPC position now allows you to make informed decisions, budget appropriately and integrate improvements into planned maintenance rather than responding under time pressure.
Preparing For EPC B Starts With Understanding Your Current Position
The confirmation of MEES Phase 2 provides something the commercial property sector has been seeking for several years: greater certainty.
While there may still be legislative detail to follow, the direction is now sufficiently clear for landlords, investors and property managers to begin preparing.
The organisations that are likely to be best placed in 2031 will not necessarily be those that spend the most, but those that understand their buildings early, prioritise improvements sensibly and develop realistic, long-term compliance strategies.
If you would like to understand how your commercial buildings compare against the proposed EPC B standard, EPC-HUB can help you review your current EPC position, identify potential compliance risks and develop a practical roadmap towards MEES compliance.
You can also read the Government’s official interim response for further detail.
