On 18 June 2026, the UK government announced its long-awaited interim response to consultations on strengthening Minimum Energy Efficiency Standards (MEES) in the non-domestic private rented sector. After more than five years of uncertainty, the announcement provides welcome clarity for landlords and investors. Below, we summarise the key points.

What will change?

From 2031, privately rented non-domestic buildings over 1,000 square metres in England and Wales will be required to meet an EPC rating of B, where cost-effective. This is a more targeted approach than the original proposals, which would have applied across the entire non-domestic private rented sector. The government estimates that raising the standard for the largest premises could save tenants £360 million per year in their energy costs by 2031.The changes will take effect following the successful passage of secondary legislation through Parliament.

What about smaller buildings?

Buildings below 1,000 square metres will remain subject to the existing EPC E minimum standard. The government has indicated that landlords of smaller properties will have additional flexibility to upgrade over time, with no fixed deadline for moving beyond EPC E. This approach is intended to reduce the burden on SMEs and high street landlords.

What has been dropped?

The previously proposed interim EPC C milestone for 2027 has been abandoned. This gives landlords and tenants more time to plan investment and retrofit works in a manner that suits their buildings and lease structures.

What stays the same?

Existing flexibility mechanisms will remain in place. The seven-year payback test will continue to apply, meaning landlords can lawfully let properties below the required EPC rating if the cost of recommended improvements would not be recouped through energy savings over seven years. Other existing exemptions will also remain available, and landlords will need to register any exemption relied upon on the PRS Exemptions Register, together with supporting documentation.

What are the key implications for landlords and investors?

Landlords of larger commercial properties now have approximately five years to assess their portfolios and plan any necessary upgrade works. Key considerations include the following:

• Reviewing EPC ratings across portfolios, particularly for properties exceeding 1,000 square metres.
• Factoring compliance costs into investment appraisals, asset management strategies and lease negotiations.
• Considering whether service charge provisions and green lease clauses may need to be updated.

What questions remain?

The government has indicated that it will publish a full consultation response in due course, setting out further detail on the policy and implementation. The government has confirmed that it will continue to work closely with industry and other stakeholders to ensure the pathway to EPC B is “fair, clear and deliverable”. Landlords will be keen to understand how the new threshold will be implemented in practice, whether transitional provisions will apply to existing EPCs, and whether the carbon metric will remain the single headline metric for non-domestic EPCs (as indicated in the government’s partial response to its 2024 EPC reform consultation, published in March 2026).