Energy performance is now a core factor in how commercial and residential property is owned, managed and valued. The latest June 2026 update to Minimum Energy Efficiency Standards (MEES) provides clearer direction on where regulation is heading and what landlords should be planning for now.

What has changed

Under current MEES rules, privately rented commercial properties in England and Wales must meet a minimum Energy Performance Certificate (EPC) rating of E, unless a valid exemption applies.

The Government has confirmed its intention to tighten standards for larger commercial buildings. From 2031, privately rented properties over 1,000m² will generally need to achieve EPC B. Smaller buildings will remain at EPC E for now, subject to existing exemptions.

The previously proposed EPC C milestone has been removed. While this extends the timeline, it does not change direction. The trajectory is towards higher minimum performance standards across the commercial stock.

Why this direction is being taken

The Government’s policy intent is to target the largest rented buildings first, where energy improvements deliver the greatest impact. By 2031, this is expected to reduce energy costs for tenants in larger buildings by around £360 million per year, while lowering demand on the energy system and supporting national energy security.

At the same time, the expectation is that smaller commercial properties and SMEs will continue to operate under the existing EPC E threshold, with a more flexible, phased approach to improvements.

This reflects a balance between decarbonisation and economic practicality, but the direction remains consistent. Energy performance is being progressively tightened across the built environment.

Market pressure is increasing

Regulation is only one driver of change. Occupiers are also reshaping expectations.

Most commercial tenants now operate under ESG or carbon reporting obligations. This is increasing demand for energy data, consumption transparency and emissions baselining within managed buildings.

As a result, landlords are increasingly expected to provide reliable energy data and support tenant reporting requirements. In many cases, this is becoming part of day-to-day building management rather than an optional extra.

Energy performance is now closely linked to:

• leasing demand
• tenant operating costs
• investor due diligence
• refinancing conditions
• long-term asset valuation

Buildings without clear energy baselines or reliable performance data are becoming harder to let, finance and justify at valuation, even before regulatory deadlines are reached.

What landlords can do now

Most EPC improvements are achieved through incremental rather than single interventions.

The first step is establishing a clear view of current EPC performance across the portfolio and identifying assets likely to require intervention before 2031.

Typical measures include LED lighting upgrades, HVAC optimisation, improved controls, insulation improvements and better energy monitoring.

The most effective approach is to get a clear understanding of the property’s current performance and then align these works with planned maintenance cycles to reduce cost and disruption.

Residential portfolios and Build to Rent

Although this update focuses on commercial property, residential landlords should also monitor policy direction.

The Government has previously consulted on raising minimum EPC standards for rented homes to EPC C. While no implementation date has been set, the trajectory aligns with wider decarbonisation policy.

According to the Office for National Statistics, the median EPC score in England is Band C (69), and Band D (68) in Wales.

Government data shows around 60 percent of homes are currently EPC C or above, meaning a significant proportion may require improvement under future standards.

For Build to Rent and residential portfolios, understanding EPC position early supports better capital planning and reduces future compliance risk.

Strategic outlook

MEES should be viewed as part of a wider shift in how property performance is assessed, financed and managed.

The direction of travel is clear. Higher-performing buildings will be more resilient to regulatory change, more attractive to occupiers, and better positioned in investment and lending decisions. Lower-performing assets will require planned intervention to maintain long-term viability.

For landlords, the priority is not reacting to individual policy updates but understanding portfolio exposure and integrating energy performance into routine asset management.

At Form, we work with landlords and tenants to align sustainability, compliance and property management into a single practical strategy focused on long-term asset resilience.

Keep an eye out for our next blog unwrapping the importance of data management in management of building performance.