EPC changes for commercial property: What landlords and investors need to know.

At a glance

• The current minimum EPC rating for commercial property is E, and properties rated F or G generally can’t be legally let.
• Previous proposals for EPC C by 2027 have been dropped.
• The current direction suggests a move towards EPC B for larger commercial properties by 2031. These changes are not yet confirmed in law.
• 80% of UK commercial properties are below EPC B, making this a widespread issue affecting landlords, investors and lenders.
• Poor EPC ratings can reduce property value, limit rental demand and make refinancing more tricky.
• Upgrade costs can be significant, and delaying action may lead to higher costs and limited contractor availability.
• Funding options include bridging finance and commercial mortgages, depending on your plans.

If you own or invest in commercial property, energy efficiency rules are becoming harder to ignore and potentially more expensive to deal with the longer you leave it.

You might have seen headlines about EPC C by 2027 or EPC B by 2030. It’s easy to assume these are already law, but they aren’t. The proposed 2027 milestone has now been dropped, and the future direction is being reshaped.

At Together, we’re already seeing landlords and investors thinking more carefully about EPC ratings. Not just because of regulation, but because of what it means for value, rental income and future borrowing.

This guide explains where things stand today, what could change and how you can start planning with more confidence.

What is the current minimum EPC rating for commercial property?

An EPC, or Energy Performance Certificate, rates a building’s energy efficiency from A to G. A is the most efficient, while G is the least.

Under Minimum Energy Efficiency Standards (MEES), most privately rented commercial properties must have a rating of E or above to be legally let. This applies to:

• New leases since 2018
• Existing leases since April 2023

This means if your property is rated F or G, you generally cannot rent it out unless you qualify for an exemption. Penalties can reach up to £50,000 for a short breach and up to £150,000 for a longer breach.

What is an EPC certificate for commercial property?

An EPC certificate is issued by an accredited assessor and is usually valid for 10 years.

You’ll typically need one when selling or letting a commercial property.

It measures how energy efficient the building is, rather than what your actual energy bills look like. It also includes recommendations for improvement. Some of these may be straightforward, while others might not be practical depending on the property.

If you’re planning ahead, it can be a useful starting point for understanding what changes might be needed.

Are EPC C by 2027 and EPC B by 2030 confirmed?

The previous proposal for an EPC C milestone by 2027 has now been dropped. The government is instead focusing on a longer-term target, with larger commercial properties expected to work towards an EPC B

rating by 2031, where it is cost-effective.

These changes are not yet law and will require secondary legislation before they come into force.

The revised approach also introduces a distinction based on property size. Buildings over 1,000 square metres are expected to be the main focus of future upgrades, while smaller properties may retain the current EPC E requirement with greater flexibility on timings.

Even though nothing has changed yet, many landlords are already starting to plan.

Waiting might feel like the safer option, but it can create pressure later. Costs may rise, contractors may be harder to secure and lenders may take a more cautious view of lower-rated properties.

At Together, we’re seeing more customers act early so they have more control over timing, cost and funding.

Which commercial properties do EPC rules apply to?

EPC rules mainly apply to privately rented commercial properties.

They don’t apply in the same way to owner-occupied buildings, but requirements can still come into play when a property is sold, let or needs a new certificate.

Future proposals may also differentiate based on property size, with larger buildings facing stricter requirements than smaller premises.

EPC exemptions for commercial property

Some exemptions exist, but they’re not automatic and usually need to be registered.

For example, listed buildings aren’t always exempt. They may only qualify if improvements would significantly change their character or appearance.

Other possible exemptions include:

• Temporary buildings
• Small buildings under 50 square metres
• Demolition cases
• Certain industrial or agricultural buildings
• Cases where tenant consent is refused
• Situations where improvements would reduce property value by more than 5%
• Recently becoming a landlord

Many exemptions are temporary and must be registered.

How many commercial properties are affected?

Over 80% of commercial properties are currently below EPC B, which means many could require upgrades if higher efficiency standards are introduced, particularly for larger buildings.

That means this isn’t a niche issue. It’s something that could affect a significant part of the market, including landlords, investors and lenders, especially those with larger or energy-inefficient assets.

Some property types may be more exposed than others. Older office buildings and certain retail units can be harder to upgrade, which may increase both cost and complexity.

Under current proposals announced in June 2026, the greatest impact is expected to fall on larger buildings (over 1,000 square metres), while smaller properties are likely to remain at EPC E for longer, with more flexibility on how and when improvements are made.

For many landlords, the key question is no longer if changes are coming, but which properties in their portfolio are most exposed.

What does this mean for property value and investment risk?

EPC is now a financial issue. A stronger rating can make a property more attractive to tenants, buyers and lenders. A weaker rating can have the opposite effect.

You might start to see:

• Lower rental demand
• Longer void periods
• More difficult lease negotiations
• Reduced buyer interest
• Fewer refinancing options

This is sometimes referred to as a “brown discount”, where lower-rated properties may be valued less due to their energy performance. The brown discount can be good news for savvy investors looking to pick up properties below market value as it’s often possible to increase the EPC rating, property value and tenant demand with strategic renovations.

Could your commercial property become unlettable?

It’s possible.

If standards increase and your property doesn’t meet them, you may not be able to agree new leases or renew existing ones.

That can have a direct impact on income. A property that can’t be legally let stops generating rent, which can affect both cash flow and long-term plans.

In fact, when the minimum rating changed to an E on 1 April 2023, between 130,000 and 135,000 commercial properties became unlettable overnight.

However, under the revised direction, this risk is more likely to affect larger buildings first, particularly those over 1,000 square metres. Smaller properties (below 1,000 square metres) are currently expected to remain at EPC E for longer, with more flexibility on upgrade timelines.

This is why many landlords are starting to review their portfolios now, rather than waiting for regulation to officially change.

What improvements are needed to meet EPC requirements?

Improving an EPC rating often involves a mix of smaller upgrades and, in some cases, more significant work.

Here are a few improvements landlords can make to boost the EPC rating of commercial property:

• LED lighting
• Heating and cooling system upgrades (HVAC)
• Better insulation
• Improved glazing
• Energy-efficient controls
• Solar panels where suitable

Moving from E to C can sometimes be achieved with relatively moderate changes.

Moving from C to B is often more involved and may require a larger investment, depending on the building.

How much could EPC improvements cost?

Commercial retrofit costs for UK landlords vary widely. EPC improvement costs depend on the property’s age, condition, size, location, current rating and target rating.

For office buildings, upgrade costs can be significant. In London, construction industry estimates suggest that a full EPC upgrade may range from £113 to £268 per sq ft, particularly for older or more complex refurbishments.

Costs are typically lower outside the capital, although the same core drivers still apply.

How can landlords fund EPC improvements?

There are several ways to fund improvements, depending on your strategy and timescales. Options include:

• Using cash reserves
• Additional borrowing
• Bridging finance
• Commercial mortgages
• Secured business loans

Bridging finance can help if you need to move quickly, for example to carry out works before a refinance or sale.

As bridging is a short-term product only, it’s important that you understand the timings of your project, and how and when you intend to repay the bridging loan before the end of the term (known as your exit strategy). Your property, or any other properties used as a security, could be at risk if you can’t repay the loan on time.

A commercial mortgage could be more suitable for longer-term funding, secured against the property.

How lenders assess EPC risk

EPC ratings are becoming a more important part of how lenders assess risk.

Alongside property value and rental income, it’s likely that lenders will start to consider how future regulation could affect the property.

A lower EPC rating could limit your borrowing options or make refinancing more difficult, especially if improvements are likely to be required in the near future.

Should you upgrade, refinance or sell?

Your best option depends on the property itself and your wider plans.

You may consider upgrading if the property is strong and the cost is viable. Refinancing may be the best option if improvements could support future value or rental income. Selling the property may be the answer if the cost of upgrading is too high for your plans.

At Together, we’ll look at your situation as a whole and help you think through what each option could mean in practice.

What should commercial landlords do now?

If you’re not sure where to start, a simple plan can help bring clarity.

You might begin by:

• Reviewing your current EPC ratings
• Checking certificate expiry dates
• Looking ahead to lease renewals
• Identifying properties most at risk
• Prioritising larger buildings where future requirements are most likely to focus
• Estimating potential upgrade costs
• Exploring funding options early

As deadlines get closer, demand for contractors and funding is likely to increase, so acting early can help avoid higher costs and delays.

For smaller properties, this process may be more gradual, but it’s still worth planning ahead to avoid being caught out by future changes and to take advantage of potential cost savings and available grants.

Common misconceptions about EPC commercial property rules

Your next steps

Current EPC commercial property rules require most rented commercial buildings to be rated E or above.

The previous 2027 milestone has been dropped, and the current direction suggests a longer-term shift towards EPC B by 2031, particularly for larger buildings, although this is not yet law.

EPC ratings can affect rent, value, finance and long-term strategy. If you’re thinking about upgrades, refinancing or reviewing your portfolio, starting early can give you more options and fewer surprises.

Speak to our team to explore your options for funding improvements or refinancing your commercial property.