"Without firm guidance, many landlords have understandably deferred projects, concerned about investing heavily in measures that may not align with final requirements. The longer the delay continues, the less achievable the interim milestones, such as the 2027 “C” rating target, become."
- Amy Cushing - Moore Barlow
We’re five years on from the 2021 consultation on the government’s proposed framework for the implementation of a minimum EPC rating of B by 2030 for commercial rental properties, including how the requirement would be introduced and applied across the sector.
The absence of a formal response is no longer just frustrating. It is actively slowing upgrades, delaying investment decisions, and leaving decarbonisation ambitions suspended in uncertainty at a time when the sector is already navigating rising costs and tighter margins.
Recent data highlights the scale of the challenge. Analysis across major UK cities shows only a small proportion of commercial stock meeting the highest efficiency standards. Just 3 per cent of buildings hold an EPC rating of A, with around 16 per cent achieving B. While cities such as Manchester and London are marginally ahead, progress remains slow and incremental, with annual improvements measured in only one or two percentage points. That pace is unlikely to accelerate without a clear policy direction.
The roots of the problem stretch back several years. A 2019 consultation, followed by the 2020 Energy White Paper, established a trajectory for higher minimum standards, including an ambition for non-domestic properties to reach EPC B by 2030.
The big jump in minimum energy efficiency rating from the current requirement of E raised the obvious issue of how this would be implemented in practice, so the 2021 consultation came about in which the government set out proposals to improve the implementation, improve enforcement, and ensure the policy can be delivered in practice.
Since then, the industry has been left waiting. Landlords were encouraged to prepare for change, but without confirmation of the rules or timetable, meaningful action has been difficult to justify.
This uncertainty has real financial consequences. Research from Savills found that moving a building from an EPC D to a B rating requires substantial capital investment, often alongside complex retrofit work. Estimates suggest costs of between £36 and £65 per sq ft, a significant outlay in a market where financing conditions remain tight.
Without firm guidance, many landlords have understandably deferred projects, concerned about investing heavily in measures that may not align with final requirements. The longer the delay continues, the less achievable the interim milestones, such as the 2027 “C” rating target, become.
Uncertainty is also reshaping leasing dynamics. Green lease clauses are increasingly common as landlords and tenants attempt to future-proof agreements. However, without clarity on minimum standards, there is no consistent approach to allocating responsibility for improvement works. This can drive up negotiation time and legal costs, creating friction in transactions and discouraging both parties from committing to longer-term arrangements.
At the same time, the wider policy landscape is evolving. Recent consultations on EPC reform and minimum energy efficiency standards suggest broader changes ahead, including stricter requirements around when EPCs must be commissioned and the removal of certain exemptions. The commercial sector still lacks a definitive roadmap. The expectation that a minimum B standard may emerge in the early to mid-2030s only reinforces the need for certainty now.
Importantly, the industry is not resisting higher standards. Many landlords recognise the long term benefits of improved energy performance, from reduced operating costs to stronger asset values and better alignment with occupier expectations. What the sector needs is clarity. A clear timetable and practical implementation framework would unlock investment, accelerate retrofitting, and support meaningful progress towards net-zero goals.
Until that clarity arrives, momentum will remain constrained. The commercial property sector is ready to act, but without firm policy direction, opportunity continues to be lost.
