The Minimum Energy Efficiency Standards for commercial property in England and Wales are heading for a significant tightening. The June 2026 DESNZ Interim Response confirmed that the previously consulted 2027 EPC C milestone is no longer being pursued, and that the proposed EPC B requirement would apply to privately rented non-domestic buildings above 1,000 m² (the current EPC E floor continues to apply to buildings below the threshold). Secondary legislation is still required and the final regulatory framework has not yet been enacted. For landlords with EPC exposure below band B in above-threshold assets, the planning window is tighter than it appears. Here is what you need to understand now.
Where MEES currently stands
Since April 2023, it has been unlawful to continue letting a commercial property with an EPC rating below E — the so-called "continue to let" prohibition. This applies to all existing leases, not just new ones, and covers the vast majority of commercially let non-domestic buildings in England and Wales.
The current EPC E minimum is well understood by the market. Most institutional landlords have addressed their sub-E exposure. The challenge now is the proposed EPC B trajectory for above-threshold assets — the >1,000 m² scope set out in the June 2026 DESNZ Interim Response. Buildings below 1,000 m² remain subject to the existing EPC E requirement.
What the proposed trajectory means in practice
EPC ratings are calculated using the UK National Calculation Methodology — iSBEM for most non-domestic buildings. The rating reflects the theoretical energy performance of the building fabric and services, not actual metered consumption.
Moving from EPC D or C to EPC B typically requires a combination of fabric improvements (insulation, glazing, air tightness), heating system upgrades (away from gas boilers toward heat pumps or district heat), lighting upgrades to LED, and controls improvements. For older commercial stock — pre-2000 construction with gas-fired perimeter heating and single-glazed facades — achieving EPC B may require substantial capital investment and may not be technically achievable without full refurbishment.
This creates a significant stranded asset risk for the above-threshold segment of the commercial property market. Above-threshold buildings that cannot reach EPC B — at proportionate cost — within the eventual compliance window may become unlettable under the proposed regulations once secondary legislation is enacted, which would materially affect their capital value. The 1,000 m² scope definition (whole building vs EPC demise) and the cost-effectiveness test remain to be settled in secondary legislation.
The importance of EPC accuracy
Before assuming a building cannot reach a target EPC rating, it is worth verifying that the existing EPC is accurate. EPC assessments for commercial buildings involve significant modelling judgements — around construction type, heating system efficiency, controls, and occupancy patterns. Inaccurate assessments, particularly for older stock, sometimes produce ratings that are more pessimistic than the building's actual performance warrants.
We have seen cases where a building rated EPC D has been re-assessed, with more accurate input data, and achieved EPC C or above without any physical changes. This is not about gaming the system — it is about ensuring the model reflects the building accurately.
Integrating MEES into asset management
The most effective approach to MEES compliance is to integrate EPC improvement into the broader asset management and refurbishment programme rather than treating it as a standalone compliance exercise.
A building energy audit that covers both EPC improvement and CRREM pathway alignment will identify the measures that deliver the greatest combined benefit — improvements that move the EPC rating, reduce operational energy intensity, and extend the CRREM Misalignment Year simultaneously. This approach maximises the return on capital expenditure and produces outputs that are useful for both regulatory compliance and investor disclosure.
What landlords should do now
Audit your EPC register: Identify all assets currently rated below B, and within that group, prioritise those approaching lease events — rent reviews, lease expiries, or break options — where MEES compliance will be a direct factor in re-letting.
Verify EPC accuracy: For assets rated C or D, consider whether the existing EPC reflects the building accurately or whether a re-assessment with updated data would improve the rating.
Model the improvement pathway: For assets that genuinely need fabric or services investment to reach EPC B, model the cost, timing, and capital required — and integrate this into your asset management business plan and valuation assumptions.
Plan for the post-Interim-Response framework: The June 2026 DESNZ Interim Response confirmed that the 2027 EPC C milestone is no longer being pursued and that the proposed EPC B requirement targets privately rented non-domestic buildings above 1,000 m². Secondary legislation is still required and the final framework has not yet been enacted, but the direction is clear and consistent with the UK's net zero commitments. The prudent position is to identify above-threshold assets now and develop evidence-based investment plans ahead of legislation. Get in touch to discuss our commercial EPC and MEES compliance service for your portfolio.