Commercial EPC Requirements 2026: What Landlords and Property Managers Need to Know

If you have been budgeting for a commercial EPC C deadline in 2027, the government has confirmed that this proposed interim milestone will not be taken forward. Instead, its June 2026 interim response sets out an intention—subject to secondary legislation—to require privately rented non-domestic buildings over 1,000 square metres in England and Wales to reach EPC B from 2031, where cost-effective.

The current legal minimum has not changed: qualifying privately rented non-domestic property generally needs an EPC rating of E or above unless the landlord has registered a valid exemption. This article explains the latest position, the properties likely to be affected and the maintenance and upgrade planning worth considering now.

What Changed in June 2026

On 18 June 2026, the Department for Energy Security and Net Zero published its interim response to the 2019 and 2021 consultations on Minimum Energy Efficiency Standards (MEES) in the non-domestic private rented sector in England and Wales.

• The proposed EPC C milestone for 2027 will not be taken forward. The staged ‘C by 2027, then B by 2030’ pathway that many portfolios had been planning for has been dropped.
• The government intends to introduce an EPC B requirement from 2031 for privately rented non-domestic buildings over 1,000 square metres, where cost-effective to do so.
• The proposal is subject to secondary legislation and further guidance, including details on how the 1,000-square-metre threshold will operate.
• For buildings below 1,000 square metres, the government intends to retain the current EPC E minimum, with no set deadline announced for a higher standard.

Two caveats are important. First, today’s law is unchanged: a landlord generally cannot grant a new tenancy, renew or extend a tenancy, or continue to let a qualifying property below EPC E unless a valid exemption has been registered. Second, EPC B from 2031 is not yet a binding legal requirement; it will take effect only if the required secondary legislation is made.

Which Buildings Could Be Affected?

One thousand square metres is approximately 10,764 square feet. The proposed threshold is likely to capture larger offices, distribution and light-industrial premises, retail warehouses, business-park buildings and some mixed-use commercial assets. It will not automatically apply to every property type or tenancy: current MEES rules apply only to qualifying privately rented non-domestic properties that are legally required to have an EPC.

The government’s policy case recognises that moving to EPC B can require substantial investment. For many older or less efficient buildings, a stronger rating may require a combination of fabric improvements, lighting upgrades, better controls, and replacement plant rather than a single isolated measure. Government estimates indicate that tenants in the largest buildings within scope could save up to £360 million per year on energy bills by 2031 if the proposed standard is implemented.

Cost-Effective Does Not Mean Ignore It

The government’s interim response states that existing flexibility mechanisms, including the 7-year payback test and exemptions, are intended to remain in place under the proposed future framework. However, the detailed legal and evidential requirements for a future EPC B standard have not yet been published.

Under the current EPC E regime, a landlord may rely on a 7-year payback exemption where the expected energy-bill savings over seven years are lower than the repayment cost of the recommended improvement or package of improvements. To register the exemption, the landlord needs the prescribed supporting evidence, including three quotes from qualified installers, confirmation that the landlord is satisfied the test is not met and the relevant cost calculations. The exemption lasts five years and must be registered before it can be relied on.

The practical lesson is to keep clear records of EPCs, assessor recommendations, quotes, specifications, permissions, costs and completed works. This supports current compliance and creates a stronger evidence base while the proposed 2031 framework is developed.

Where Things Stand in September 2026

The June 2026 interim response remains the key government statement on non-domestic MEES reform. It confirms the direction of travel, but it does not itself create a new EPC B legal requirement. The proposed 2031 standard for larger privately rented buildings will take effect only if secondary legislation passes through Parliament. The government has also said that further implementation details, including the treatment of the 1,000-square-metre threshold, will be set out in a full response and updated guidance.

Current law remains unchanged. Qualifying privately rented non-domestic property in England and Wales must generally meet EPC E unless a valid exemption is registered. Since 1 April 2023, the requirement has applied to continuing lettings as well as new tenancies, renewals and extensions.

Separately, the EPC reform programme is progressing. The government has confirmed that non-domestic EPCs will retain the carbon-based Environmental Impact Rating as their single headline metric and that EPCs will retain a ten-year validity period. The rollout of new-style domestic EPCs, initially targeted for October 2026, has been moved to the second half of 2027. Landlords should monitor future announcements for the detailed timetable and arrangements affecting non-domestic EPCs.

Projects to Start Planning Today

The sensible response is not a rushed retrofit programme. It is to align planned maintenance, renewal, and refurbishment cycles with a building’s energy performance strategy. That gives owners more opportunities to select efficient specifications when assets are already due for repair or replacement.

Start with a Current Assessment

For larger assets that may fall within the proposed threshold, review the current EPC, its expiry date, the floor area being relied on and any existing recommendation report. Where information is out of date, consider a current EPC and professional advice from an assessor or specialist on likely improvement options. This is not a new legal obligation simply because a building exceeds 1,000 square metres; it is a practical planning step.

Fabric and Building Envelope Works

Fabric works can be disruptive and may require longer lead-in times, so they are often best considered alongside planned repairs, refurbishment or renewal cycles.

Potential opportunities include:

• Roof repairs or re-covering, with insulation considered at the same time
• Draught-proofing, door closers, loading-bay seals and repair of failed glazing units
• Remedial work to damp, gutters and rainwater goods that may affect building performance

Lighting, Controls and Building Services

LED lighting and well-commissioned controls can be comparatively straightforward efficiency measures, although their EPC and payback impacts should be assessed on a building-by-building basis. Consider replacing the remaining inefficient lighting where appropriate, along with presence detection, daylight dimming, and properly configured time- and temperature-based controls for heating, ventilation, and hot water.

Lease Events and Void Periods

Map potential works against lease expiries, break dates, rent reviews and planned void periods. A void may offer a practical opportunity to undertake disruptive improvements, although the commercial case will depend on the asset, programme and lost-rent implications. At renewal, landlords and occupiers may also wish to consider green lease provisions covering energy data sharing, access, works, operational responsibilities, and cost allocation.

Build a Phased Programme

Sequence possible improvements across several budget years and, where sensible, combine them with planned maintenance visits. Maintain a clear paper trail of costs, specifications, quotes, approvals and expected savings. This will support current EPC E compliance and future investment decisions. Do not assume that a future EPC B exemption process will be identical to the current EPC E exemption framework until legislation and guidance are published.

What Property Managers Should Do This Quarter

1. Identify the properties likely to sit above or below the proposed 1,000 square metre threshold, using reliable floor-area information.
2. Confirm that each qualifying let unit meets the current EPC E minimum, or that a valid exemption is registered and still in date.
3. Review the currency of EPCs and recommendation reports for larger assets, then seek assessor or specialist advice on feasible upgrade routes where needed.
4. Make energy performance a standing consideration in planned maintenance, refurbishment and asset-replacement decisions.
5. Set a phased investment plan but keep it under review as legislation and detailed government guidance are published.

Frequently Asked Questions

Is EPC C by 2027 definitely cancelled for commercial property?

Yes—as a proposed non-domestic MEES milestone. The government’s 18 June 2026 interim response says the previously proposed EPC C target for 2027 will not be taken forward for the non-domestic private rented sector in England and Wales. This does not change the current EPC E legal minimum.

What is the minimum commercial EPC rating right now?

For qualifying privately rented non-domestic property in England and Wales, the current minimum is EPC E unless a valid exemption has been registered. Since 1 April 2023, this applies to existing lettings as well as new tenancies, renewals and extensions. Not every commercial property or tenancy falls within the regulations; the rules apply to properties legally required to have an EPC and, generally, to tenancies of more than 6 months and less than 99 years.

Does EPC B by 2031 apply to smaller buildings?

Not under the government’s current stated intention. It proposes EPC B from 2031, where cost-effective, for privately rented non-domestic buildings over 1,000 square metres. Buildings below that threshold are intended to remain on EPC E, with no announced date for a higher minimum standard. The proposal still requires secondary legislation and implementation details are awaited.

What if reaching EPC B is not affordable?

The government says existing flexibility mechanisms, including the 7-year payback test and exemptions, are intended to remain. However, the full legal and evidential detail for a future EPC B obligation has not yet been published. Under the current EPC E standard, a registered 7-year payback exemption may apply when qualifying improvement measures do not meet the statutory simple payback calculation.

Talk to Us About Phased Energy-Efficiency Improvement Works

2031 may feel distant, but the most practical route to better EPC performance often runs through maintenance and replacement work that is already being planned. National Maintenance Services works with landlords, property managers and letting agents across the UK on reactive repairs, planned maintenance and refurbishment—from roofing and building fabric to electrical and lighting upgrades.

Talk to us about phased energy-efficiency improvement works, and we will help you sensibly sequence suitable projects, building by building.