More than four in five commercial buildings across England’s major cities still fall below an EPC rating of B, according to new analysis from the British Property Federation (BPF), prompting renewed calls for government clarity on future minimum energy efficiency standards.
The EPC’s annual review of Energy Performance Certificate (EPC) data across London, Birmingham, Bristol, Leeds, Liverpool, Manchester and Newcastle found that just 3% of commercial properties hold an EPC rating of A, with a further 16% achieving B. That leaves 81% below the level widely expected to form the backbone of future regulation.
The Minimum Energy Efficiency Standards (MEES) set the minimum energy performance a property must meet before it can be legally let in England and Wales. Currently, landlords cannot grant or continue a lease on a property with an EPC rating of F or G. The government has signaled its intention to tighten non-domestic standards to EPC B by 2030, although the exact timeline is to be confirmed.
Progress remains slow
While there are signs of improvement, they are marginal. Across the seven cities analysed, the proportion of buildings achieving EPC B has risen by one to two percentage points year-on-year.
Manchester currently leads, with 22% of commercial stock rated A or B, followed closely by London at 21%. However, progress remains gradual, with an estimated 190 million square metres of commercial real estate across these cities still below EPC B.
For landlords and investors, this presents a growing strategic challenge. As occupier expectations shift and sustainability becomes embedded in corporate decision-making, lower-rated buildings risk losing competitiveness.
Policy uncertainty holding back investment
At the heart of the issue is the government’s continued lack of response to its 2021 consultation on future Minimum Energy Efficiency Standards (MEES) for the non-domestic private rented sector.
While the government has recently confirmed a number of EPC framework reforms, including retaining a carbon-based headline metric for non-domestic buildings and introducing changes to when EPCs must be in place, it has yet to provide clarity on how minimum standards will evolve. For property owners, this creates uncertainty around upgrade timelines, capital planning and compliance risk.
What businesses should consider now
Regardless of policy delays, the direction of travel remains clear: commercial buildings will need to become significantly more energy efficient over the coming decade.
For landlords, this raises several immediate considerations:
- Stranded asset risk: Buildings with poor EPC ratings may become harder to let, refinance or sell if standards tighten suddenly.
- Capital planning: Energy efficiency upgrades often require long lead times. Delaying action until regulation is finalised could compress delivery windows and increase costs.
- Tenant demand: Many corporate occupiers now have their own net zero targets and ESG reporting requirements. Poor-performing buildings may struggle to attract or retain tenants.
- Operational cost exposure: Less efficient buildings typically result in higher energy bills, a direct cost pressure for tenants and, in some cases, landlords.
For occupiers, the issue is equally important. Leasing space in a poorly performing building could mean higher operating costs, reputational risk, and future disruption if major retrofit works become necessary to meet compliance standards.
A strategic decision point for the commercial sector
The BPF’s findings highlight a sector at a crossroads. While incremental improvements are being made, the scale of the upgrade challenge remains significant.
With 81% of commercial stock below EPC B across major cities, businesses cannot afford to rely solely on government timelines. Proactive energy performance improvements are increasingly a matter of commercial resilience, not just regulatory compliance.
If you’re interested in learning how to improve the energy efficiency of your building stock, get in touch with Sustainable Energy First for a no-obligation chat.