Commercial estate agents are increasingly finding themselves on the frontline of one of the most complex and uncertain regulatory issues facing the property sector today: Energy Performance Certificate (EPC) compliance.
Recent warnings from the British Property Federation suggest that as many as four in five commercial buildings in major UK cities could be at risk of becoming unlettable without urgent clarity from government on future EPC regulations. For agents advising landlords, managing portfolios and negotiating leases, this is no longer a distant policy discussion - it is a real and immediate commercial property imperative.
Why EPC compliance is becoming a leasing barrier
Under the current Minimum Energy Efficiency Standards (MEES), landlords cannot grant new leases on commercial properties with an EPC rating below E unless a valid exemption is registered. While this threshold has been in place for several years, the direction of travel is clearly towards more stringent requirements as part of the UK’s wider net-zero commitments and aspirations
The challenge for agents is the lack of firm regulatory timelines. Discussions around future minimum ratings and enforcement remain ongoing, leaving landlords uncertain about when they may need to undertake potentially significant upgrades.
This uncertainty is already influencing leasing decisions. Agents are seeing growing hesitation from prospective tenants when properties have lower EPC ratings, particularly among corporate occupiers with Environmental, Social and Governance (ESG) targets and cost sensitivity around energy consumption.
In practice, EPC ratings are rapidly becoming not just a compliance issue, but a key factor affecting marketability.
The growing legal and commercial risks
For commercial agents, EPC compliance is increasingly intertwined with professional risk. Landlords who attempt to let non-compliant properties face potential penalties, but agents may also encounter challenges if EPC risks are not clearly communicated during marketing and negotiations. Transparency around ratings, potential improvement requirements and future regulatory changes is becoming essential to avoid disputes later in the leasing process.
There is also a clear commercial impact. Properties with poor energy performance may remain on the market for longer, require greater incentives to secure tenants or face downward pressure on rental values. In some cases, they may become effectively unlettable until costly improvement works are undertaken.
For agents managing landlord relationships, this can create difficult conversations around investment, expectations and long-term asset viability.
What agents should be advising landlords now
While the regulatory landscape remains uncertain, there are several practical steps commercial agents should be encouraging their clients to take.
First, landlords should review the EPC status across their portfolios and identify properties at risk of falling below current or potential future thresholds. Early visibility is critical to planning and budgeting.
Second, agents should advise landlords to obtain professional assessments on potential improvement works. In many cases, relatively modest upgrades such as lighting changes, insulation improvements or heating system adjustments can significantly improve ratings.
Third, EPC considerations should be factored into leasing strategy. This includes clear communication with prospective tenants about current ratings, potential improvement plans and how responsibility for energy-related works is addressed within lease terms.
Finally, agents should ensure landlords understand that waiting for full regulatory clarity may increase long-term risk. Properties that fall behind energy expectations may see reduced demand, lower valuations and more limited financing options.
A shift in tenant and investor expectations
Beyond compliance, EPC performance is increasingly shaping market perception. Occupiers are more focused than ever on energy efficiency due to rising operational costs and sustainability commitments.
At the same time, lenders and investors are placing growing emphasis on environmental performance when assessing commercial property portfolios as a viable form of security and investment asset, respectively.
For commercial agents, this means EPC ratings are becoming an integral part of positioning, marketing and advising on asset strategy - not simply a technical regulatory requirement.
From compliance issue to strategic priority
For many commercial agents, EPC regulations are evolving from a compliance/legal consideration into a central commercial advisory issue.
Those who proactively guide landlords on risks, timelines and improvement strategies will be best placed to protect client relationships and help ensure assets remain lettable in an increasingly regulated market.
While policy clarity is still developing, one message is already clear: for both agents and landlords, early awareness and proactive planning are far less costly than reacting once a property has become unlettable.
