EPC Reform: Public Consultation Review and the Path Ahead

As the UK accelerates towards its net-zero goals, the property industry faces mounting pressure to enhance energy efficiency standards. However, uncertainty surrounding key regulatory deadlines has left landlords, developers, and property professionals in a state of limbo, unable to effectively plan for future compliance.

A consultation in 2021 proposed that all non-domestic rented properties should achieve an EPC rating of B by 2030, with an interim milestone requiring an EPC rating of C by 2027. In December 2024, the government published a long-awaited public consultation on Energy Performance Certificate (EPC) reform, introducing updates and refinements to the EPC framework. However, it does not specifically reaffirm the proposed EPC B requirement by 2030, as set out in the 2021 consultation.

An article by the Intermediary published in February 2024 speculates that the requirement for non-domestic buildings to achieve EPC C will be pushed back from 2027 to 2028. Whilst it is likely that the deadline will be pushed back, the article lacks a reliable reference and there has not been an official confirmation. Our advice is to assume that the proposals set out in 2021 will come into force.

This article provides a summary of the 2021 and 2024 consultations, highlighting the likely policy changes and their potential implications for the sector.

2021 Consultation: The Proposed Trajectory

The current minimum EPC requirement for non-domestic properties stands at an E rating. The 2021 consultation proposed tightening these standards to an EPC B by 2030, with an interim milestone of achieving EPC C by 2027.

To facilitate compliance, a phased approach was proposed, introducing compliance windows, which would require landlords to present a valid EPC two years before the final improvement deadline. This phased approach aimed to provide landlords with sufficient time to implement upgrades while enabling local authorities to enforce regulations efficiently. The proposed compliance windows were as follows:

First Compliance Window: EPC C (2025-2027)

• 1st April 2025: Landlords of all non-domestic rented buildings in scope of MEES must present a valid EPC.

• 1st April 2027: All non-domestic rented buildings must have improved the building to an EPC ≥ C, or register a valid exemption.

Second Compliance Window: EPC B (2028 – 2030)

•  1st April 2028: Landlords of all non-domestic rented buildings in scope of MEES must present a valid EPC.

• 1st April 2030: All non-domestic rented buildings must have improved the building to an EPC ≥ B, or register a valid exemption.

At each enforcement date in 2027 and 2030, landlords will need to demonstrate the building has reached the highest EPC band that a cost-effective package of measures can deliver. It is also worth noting that under the proposed changes, enforcement and compliance will move away from the point of let and lease renewal. Hence, all non-domestic rented buildings will need to achieve an EPC C by 2027 and EPC B by 2030, regardless of when they are let or have their lease renewed.

Since the publication of this consultation, no further confirmation of these timelines has been provided by the government, leading to speculation that they may be subject to delay. However, at Develeco, we strongly advise landlords and property owners to continue planning for the original deadlines, as delaying action could result in financial and operational challenges. Retrofit strategies should be considered and implemented in alignment with current legislative expectations to future-proof assets and maintain compliance.

2024 Consultation: A Broader Reform Agenda

In December 2024, the government released an updated consultation on EPC reform, focusing on modernising and improving the framework. However, unlike the 2021 consultation, the EPC B requirement for non-domestic properties was not confirmed, creating further uncertainty. Instead, the consultation introduces a series of measures aimed at enhancing the EPC system, including:

Enhancing EPC Quality and Accuracy

• Updating assessment methodologies to better reflect actual building performance, rather than theoretical efficiency calculations

New EPC Metrics

• Moving towards a performance-based approach, prioritizing real energy consumption data to provide a more accurate representation of energy efficiency.

EPC Validity Period Reduction

• Proposals to shorten the current 10-year validity period, ensuring EPCs remain relevant and reflective of a building's current energy performance.

Improved Compliance and Enforcement

• Strengthening the role of local authorities and regulatory bodies to increase compliance rates and accountability among landlords

Better Data Accessibility and Integration

• Improving data management systems to make EPC data more accessible to property professionals, with potential integration into property management platforms

At Develeco, we think that the proposed reforms have the potential to enhance the accuracy, effectiveness, and reliability of EPCs, making them more valuable tools for the property sector. However, the continued lack of clarity regarding the EPC B trajectory is frustrating.

Our Advice for Landlords and Property Owners

Given the evolving regulatory landscape, we recommend that key stakeholders to take proactive, decisive action to mitigate potential risks and ensure long-term compliance. Our key recommendations include:

Continue Planning for Existing Compliance Timelines

• While regulatory deadlines remain uncertain, it is prudent to assume the original EPC B target remains in place and begin planning upgrades accordingly to avoid last-minute compliance challenges.

Implement Cost-Effective Energy Efficiency Measures

• Investing in energy efficiency improvements now will not only ensure compliance but also enhance the value and performance of assets, reduce operational costs, and contribute to sustainability goals.

Prepare for Stricter Compliance Requirements

• Be aware: if your EPC is more than 2-years old, the new SAP methodology and associated carbon factors might mean that your current EPC Rating is lower than the Rating lodged online. With proposed changes to compliance monitoring and enforcement, property owners should ensure their EPCs are up-to-date and reflective of their building’s current energy performance.

Anticipate Shorter EPC Validity Periods

• The possibility of a reduced validity period means more frequent assessments may be required, necessitating ongoing monitoring and improvement of building performance.

Seek Expert Retrofit Advice Early

• We can help property owners develop tailored retrofit strategies for energy efficiency improvements, ensuring compliance with current and future regulations while optimising costs. Our retrofit strategies can accurate cost estimates, thus ensuring that CAPEX is robustly forecast alongside tenure considerations and end-of-life building services regimes.

Conclusion

The 2024 consultation represents a significant step in refining the EPC framework, with a focus on improving data quality, compliance, and the usability of certificates. However, the lack of confirmation regarding the EPC B trajectory for non-domestic properties means uncertainty remains.

At Develeco, we emphasise the importance of preparing for the worst-case scenario by implementing or forecasting energy efficiency measures now, ensuring compliance readiness, and safeguarding property investments against potential regulatory shifts.

With our expertise in retrofit advisory and compliance planning, we are well-positioned to support landlords and property owners in navigating these changes and achieving their energy efficiency goals.