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Market Insight

MEES Update: Legislation is on hold, but market dynamics are not

As the drive toward net zero intensifies, energy efficiency regulation continues to evolve.
September 4, 2025
As the drive toward net zero intensifies, energy efficiency regulation continues to evolve.

The Minimum Energy Efficiency Standards (MEES), introduced under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, remain a key consideration for commercial landlords and occupiers alike.

With further changes anticipated, the next six months will be crucial for those with commercial property interests to get ahead of their obligations and risks, as Nicki Rought, Associate in the Building Consultancy team at Vail Williams, explores.

EPC E now the legal minimum

Since April 2023, it has been unlawful to continue letting commercial properties in England and Wales with an Energy Performance Certificate (EPC) rating below E unless a valid exemption has been registered.

This applies to both new and existing leases. Enforcement sits with local authorities, who can issue financial penalties of up to £150,000 per breach, in addition to publishing details of non-compliance online.

In April 2024, the government confirmed its ongoing commitment to net zero by 2050, and a further consultation on the non-domestic private rented sector (PRS) regulations is expected in late 2025.

While the government has paused legislation mandating the uplift to EPC C by 2027 and EPC B by 2030, the direction of travel remains clear.

Statutory changes paused but market is not

Though statutory changes are temporarily on hold, investors, occupiers, and funders are already embedding higher energy efficiency requirements into transactions.

This is effectively driving compliance through the market, particularly for institutional-grade property.

While legislative change may be delayed, landlords and occupiers should expect increasing pressure in the following areas:

Increased Due Diligence
  • Buyers, tenants and lenders are placing greater emphasis on EPC ratings and energy efficiency during acquisitions, renewals, and refinancing.
  • Expect more requests for energy audits and sustainability data.
Market Segmentation
  • Properties with EPC ratings of D or below are starting to attract value adjustments, longer void periods, or higher capex assumptions.
  • This is already impacting valuations and may be further reflected in the next 6 months’ investment decisions.
Sustainability Clauses in Leases
  • Occupiers are increasingly negotiating green lease provisions, including cooperation on energy improvement works and data sharing.
  • Landlords should prepare for greater collaboration, especially on multi-let properties where shared services are involved.
Cost Planning for Improvements
  • MEES compliance work takes time: identifying cost-effective measures, managing planning requirements (for listed or constrained buildings), and funding capex.
  • With the proposed 2027 deadline for EPC C still under consideration, the next six months present a strategic opportunity to plan works early.
Exemptions Review
  • Existing exemptions last for five years. Properties with exemptions registered in 2018 or 2019 will soon need to be reassessed and re-registered or improved to meet current standards.

MEES: Top Tips for Landlords

  • Review your portfolio: Identify properties at risk of non-compliance or those approaching exemption expiry.
  • Commission up-to-date EPCs: Many older certificates are based on now-outdated software, potentially misrepresenting a property’s performance.
  • Engage early with tenants: Explore opportunities for joint investment in upgrades or operational improvements.
  • Plan for the long-term: Don’t wait for regulation to catch up – future-proof assets now to stay ahead of investor and occupier expectations.

 

 

MEES: Top Tips for Occupiers

  • Lease renewals or relocations may trigger fresh MEES considerations. Factor EPC ratings into selection criteria.
  • Energy costs and carbon targets increasingly align. Partnering with landlords on energy efficiency improvements could yield both sustainability and cost benefits.
  • Be proactive: Ask for energy data, understand your operational impact, and engage in lease negotiations with ESG in mind.
  • Although MEES legislation is in a holding pattern, market dynamics are not.
  • The next six months offer landlords and occupiers alike a valuable window to take control of their energy efficiency strategy, mitigate risks, and align with broader ESG and investment objectives.

A formal government response detailing the MEES trajectory for non-residential properties – EPC C by 2027, EPC B by 2030, and potential exemptions or implementation mechanisms – is likely to be published this autumn.

Once available, this will clarify compliance timelines and help commercial landlords and energy assessors plan energy efficiency investments more effectively.

Need help understanding your MEES obligations or improving your EPC rating? Get in touch with our building consultancy or energy and sustainability teams for tailored advice.

Get in touch

Key Contact
Nicki Rought

Associate

Woking

+44 (0)1483 446800

+44 (0)7802 341671

LinkedIn

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