Real Estate

Navigating energy performance certificate reform: challenges and opportunities for commercial landlords

Stephen Andrews 30 September 2025

As the UK works towards achieving net-zero emissions by 2050, commercial landlords are facing a major regulatory change. Starting in 2030, all leased commercial properties in England and Wales must attain a minimum Energy Performance Certificate (EPC) rating of B. Additionally, private rented homes will need to achieve an EPC rating of C. This represents a significant increase from the current minimum requirement of E.

In this article, we explore what the evolving legislation means for property owners and outline practical steps on how to prepare.

The new EPC changes

Since April 2018, renting commercial and private properties with an EPC rating below E has been illegal under the Minimum Energy Efficiency Standards (MEES). Proposed changes to the EPC regulations may soon become mandatory but are still under government consultation. These changes include the following.

By April 2027, all rented commercial properties must have a minimum EPC rating of C
By April 2030, all rented commercial properties must achieve a minimum EPC rating of B, while private rented homes will need a rating of C or equivalent
Properties that do not meet these minimum EPC ratings cannot be legally rented out in the market

Currently, only an estimated 30% of commercial properties satisfy the future minimum EPC standards. These changes are not merely regulatory formalities; they signify a fundamental shift in how real estate needs to be managed, upgraded, and insured.

Exploring exemptions

While the upcoming EPC requirements are stringent, there are specific exemptions that landlords may be able to claim, provided they are properly documented and registered. These exemptions include the following.

Listed buildings: Properties that are officially listed may be exempt if the required energy improvements would ‘unacceptably alter’ the building’s character or appearance. In such cases, landlords must provide supporting evidence, such as advice from a conservation officer.
Temporary structures: Buildings designed for use over a period of less than two years are not subject to the EPC upgrade requirements.
Demolition plans: If a building is scheduled for demolition and the landlord or seller has obtained all necessary planning and conservation consents, the EPC requirements do not apply.
Holiday accommodation: Properties rented out for less than four months a year or under a license to occupy are exempt from the EPC upgrade obligations.
Places of worship: Active religious buildings, such as churches, mosques, and temples, are not required to meet the new EPC thresholds.
Industrial, agricultural, and workshop buildings: Buildings used for industrial processes, workshops, or non-residential agricultural purposes may be exempt due to their typically low energy usage.
Small detached buildings: Buildings with a total floor area of less than 50 square meters are not required to meet the EPC minimums.
Devaluation risk: If an independent surveyor determines that the required energy improvements would reduce the property’s market value by more than 5%, an exemption may be granted.

These exemptions provide flexibility, but landlords must properly document and register them with the PRS exemption register to avoid penalties.

The implications for property owners

The financial and legal consequences of non-compliance with EPC standards are significant. Non-compliant properties risk becoming ‘stranded assets,’ losing marketability and value, while those with higher EPC ratings attract buyers and tenants, often yielding better prices and rents.

Landlords face hefty fines for non-compliance: 10% of the rateable value (ranging from £5,000 to £50,000) for properties let for three months or less, and 20% (ranging from £10,000 to £150,000) for those let longer. Similarly, misleading information on the PRS exemption register can incur fines up to £5,000.
Moreover, tenant expectations are shifting towards sustainability, making energy-efficient buildings preferable for reducing operational costs and enhancing long-term occupancy.

Key tips on how to prepare

Enhancing a property's EPC rating goes beyond simply complying with regulatory requirements; it's essential for safeguarding your investment in a market that increasingly prioritises sustainability. As energy efficiency becomes a crucial element in tenant decision-making and property valuation, landlords should take proactive measures to upgrade their buildings.

One of the most effective measures to improve a property's energy efficiency is to enhance insulation throughout the building. Upgrading insulation in walls, lofts, and floors helps reduce heat loss, increases thermal efficiency, and lowers energy consumption. This not only boosts the EPC rating but also leads to reduced utility bills for tenants.

Another impactful strategy is the installation of energy-efficient heating systems. Modern heating systems consume less power while maintaining comfort, making them both environmentally friendly and cost-effective. Additionally, switching to LED lighting provides a quick benefit, as LEDs use significantly less energy than traditional bulbs and have a longer lifespan.

Windows play a crucial role in energy performance as well. Installing double or triple glazing helps retain heat and reduces drafts, contributing to a more stable indoor climate and improved EPC scores. For landlords looking to invest in the long term, renewable energy solutions such as solar panels or heat pumps can dramatically enhance a building's sustainability profile.

Collectively, these upgrades can significantly improve a property's EPC rating, making it more appealing to prospective tenants and buyers. More importantly, they ensure compliance with future regulations while positioning the property as a competitive, energy-efficient option in the market.

Miller is here to help

Retrofitting and refurbishment projects come with inherent risks, making the right insurance coverage essential throughout and beyond the upgrade process.

At Miller, we help clients navigate these regulatory shifts with clarity and confidence, ensuring compliance is not just met, but leveraged as a competitive advantage.

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