By Tom Handford MRICS
Commercial landlords, asset managers, investors and developers now have a clearer, if still incomplete, picture of where Minimum Energy Efficiency Standards (MEES) are heading for non-domestic property in England and Wales. The government has confirmed a 2031 deadline and a floor area threshold, but has also confirmed that a key part of how that threshold will work in practice is still to be decided. This article sets out the confirmed position for commercial property first, then summarises the parallel, faster-moving changes on the residential side.
The current position for commercial property
The existing minimum standard for non-domestic rented property is EPC Band E. This applied to new lettings from 1 April 2018 and was extended to all existing lettings from 1 April 2023, so it now covers the whole non-domestic private rented stock, not just new deals. A landlord letting a sub-standard property (below E) without a valid exemption registered is in breach.
A number of exemptions are already available and continue to apply, including a seven-year payback test, where a required improvement is exempt if its cost would not be recovered through energy savings within seven years, alongside exemptions for cases where all relevant improvements have already been made, where third-party consent cannot be obtained, and where independent evidence shows the works would reduce the property's value.
What is changing: EPC B by 2031, but only above 1,000m²
In an interim response published in 2026, the government confirmed that non-domestic buildings over 1,000 square metres will need to reach EPC Band B by 2031, but only where doing so is cost effective. This is a materially different position from where the consultation started. A previously proposed interim step of EPC Band C by 2027 has been dropped and will not be implemented.
Buildings under 1,000 square metres remain subject only to the existing EPC E minimum standard, with no new deadline set for them at this stage. The seven-year payback test and the wider exemptions regime are being retained for the new EPC B standard as well, so the government's stated position is that only improvements that are practical, affordable and cost effective will be required.
How will the 1,000m² threshold actually be applied?
This is the point most relevant to anyone managing or investing in multi-let commercial buildings, and it is worth flagging clearly: the government has not yet said how the 1,000 square metre threshold will be measured or applied.
The published interim response sets out the headline figure but does not specify the method of measurement (for example, gross internal area versus net internal area), whether the threshold is assessed at whole-building level or at the level of an individual let unit or demise, or how floor area should be treated where a single building over 1,000 square metres is split across multiple sub-leases, some of which may individually be well under that size. The government's own text on this point states only that "further detail on these proposals and implementation of the threshold will be set out in the forthcoming government response to the public consultations."
In practice, this leaves a real question mark for owners of multi-let buildings: would a 5,000 square metre office building let to ten tenants each occupying 500 square metres fall inside the new EPC B requirement because the building as a whole exceeds the threshold, or does each demise need to be assessed on its own terms? The answer has significant implications for portfolio planning, capital expenditure forecasting and lease negotiations, and it is not yet answered.
Other matters are also still open. The interim response does not set out enforcement penalties for the new standard, how shell-and-core lettings will be treated, or whether new statutory duties will be placed on tenants (for example, to cooperate with landlord works or share consumption data). These are due to be addressed in the government's full response to the consultation, alongside draft legislation, which the government has said it wants to bring forward "at the earliest opportunity." No date has yet been published for this full response.
Reform of the EPC metrics themselves for non-domestic buildings has not been confirmed alongside these changes. The government's separate partial response on EPC metric reform states that the non-domestic Environmental Impact Rating will be retained as the headline metric for now, with a fuller response on non-domestic EPC matters still to follow.
Advice for landlords, investors, and asset managers
Until the full government response is published, commercial landlords and investors cannot yet finalise capital planning around the 1,000m² threshold with certainty, particularly for multi-let assets. What is confirmed is the direction of travel: EPC B by 2031 for larger buildings, retained cost-effectiveness safeguards, and no interim 2027 milestone to plan around.
Asset owners and managers reviewing acquisition due diligence, refurbishment programmes or lease renewals ahead of 2031 should treat the threshold question as an active risk to monitor and should watch for the government's full consultation response. We recommend planning on a worst-case basis: that the 1,000m² threshold is applied to the whole building, capturing any smaller lease demises within it, rather than assuming smaller units will fall outside the standard.
Summary of key dates
| Sector | Change | Date |
|---|---|---|
| Non-domestic | Current minimum standard: EPC E (all lettings) | In force since 1 April 2023 |
| Non-domestic | Minimum standard for buildings over 1,000 sq m: EPC B, where cost effective | 2031 |
| Non-domestic | Threshold methodology and treatment of multi-let buildings | Not yet published |
| Non-domestic | Full consultation response and draft legislation | Not yet dated |
Sources
Non-domestic private rented property: minimum energy efficiency standard, landlord guidance
Improving the energy performance of privately rented homes: government response
Reforms to the Energy Performance of Buildings regime: partial government response
Article prepared for Develeco, August 2026. Figures reflect published government positions at the time of writing and are subject to change as further consultation responses and legislation are published.
