The heat is on for landlords: Government interim response to MEES in the non-domestic private rented sector

New MEES rules would require larger rented commercial properties to achieve an EPC B rating by 2031, while smaller properties remain at the E rating.

The Government has published its long-awaited interim response to the 2019 and 2021 consultations on tightening minimum energy efficiency standards (MEES) for the non-domestic private rented sector (PRS) in England and Wales. The response sets out a more targeted approach than previously proposed, with significant implications for landlords and tenants of larger commercial premises.

The background

For some time, the Government has been consulting on how to raise the minimum energy efficiency standard for non-domestic properties beyond the current E rating. Earlier proposals had suggested a staged approach, with an interim milestone requiring properties to achieve a C rating by 2027 before progressing to B by 2030. Landlords and tenants have been waiting for clarity on whether those proposals would be taken forward.

What has the Government confirmed?

The interim response marks a notable shift in policy. The key points are as follows:

A size-based threshold

The Government has confirmed its intention to apply the new higher standard only to larger commercial properties. From 2031, all privately rented non-domestic buildings over 1,000 square metres in England and Wales will be required to achieve a B rating, where cost-effective. Buildings below 1,000 square metres will continue to be subject to the current requirement of having an E rating, with no set deadline to go beyond that level.

No EPC C interim milestone

The previously proposed requirement for properties to achieve a C rating by 2027 will not be taken forward. The Government has stated that this is intended to give landlords and tenants more time to improve the efficiency of their buildings in ways that suit their buildings and letting arrangements.

Whilst this will come as welcome news to many, it means the focus has now shifted directly to the 2031 deadline of a B rating for larger properties.

Existing flexibility mechanisms retained

The response confirms that existing flexibility mechanisms will remain available. This includes the seven-year payback test, which means energy efficiency improvements are required only where they are cost-effective relative to projected savings over a seven-year period. Existing exemptions will also continue to apply, ensuring that improvements are required only where practical and affordable.

Legislation still required

It is important to note that the proposed changes to MEES for larger buildings will take effect only after the successful passage of secondary legislation through Parliament. The Government has indicated that it aims to introduce legislation and updated guidance at the earliest opportunity and says it is ‘working with stakeholders to get the detail right’.

What does this mean in practice?

For landlords of larger commercial properties, the 2031 compliance deadline will require forward planning. Whilst the removal of the 2027 C rating milestone provides additional time, the need to achieve a B rating should not be underestimated. Landlords should consider obtaining up-to-date EPCs for affected properties and commissioning assessments of what improvement works might be required.

For landlords and tenants of smaller commercial properties, the position is less immediately pressing. That said, they should remain mindful that the Government has reserved its position on this sector and further changes may follow.

Next steps

The publication of the interim response is a significant step forward after several years of uncertainty, but it remains an interim position. The full Government response to the consultations is yet to be published, and secondary legislation will be required before the new standard takes effect.

Landlords of larger non-domestic premises should use the period before 2031 to review their portfolios and lease structures, take professional advice on the works likely to be required, and factor the costs and logistics of improvement works into their commercial planning.

If you would like to discuss any aspect of this article further, please contact the Property team on 0113 244 6100.

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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to
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