If you own, develop or fund commercial property over 1,000 m² in England or Wales (roughly 10,750 sq ft), you need to achieve an EPC B by 2031 or the value of your property may fall by over 21%. The government’s June update quietly dropped the interim EPC C deadline that had been pencilled in for 2027, and buildings below that size threshold will stay at the current minimum of E.
You’ll still see “C by 2027, B by 2030” quoted all over the internet, and we’ll hold our hands up: some of our own older articles said the same. Those dates have gone. What hasn’t changed is where the bar ends up, and for bigger buildings we’d argue the financial reasons for getting there early now outweigh the legal ones.
So we’ve brought our thinking together in one place. Below, we look at where the rules actually stand, what an upgrade from C to B can be worth, how long a B rating is likely to keep you in the clear, and the order we’d tackle the work in so you don’t end up spending money twice.
The government published its interim response on non-domestic Minimum Energy Efficiency Standards (MEES) on 18 June 2026. In short, the old two-step plan has been replaced by a single target aimed at larger buildings. A separate response on EPC reform, published earlier in the year, confirmed how commercial certificates will be calculated and when you’ll need one.
| Question | Current position |
| Minimum rating today | EPC E for new and existing lettings, in force since April 2023 |
| Penalty for letting below E | 10% to 20% of rateable value, from £5,000 up to £150,000, plus a public register entry |
| Buildings over 1,000 m² | EPC B from 2031, where cost-effective |
| Buildings under 1,000 m² | Stay at EPC E, with no date set for anything higher |
| Interim EPC C (2027) | Dropped |
| “Cost-effective” test | Seven-year payback test and existing exemptions retained |
| Headline rating for commercial EPCs | Stays as the single carbon-based rating |
| EPC validity | Stays at 10 years |
| When you need an EPC | At the point of marketing, not only at sale or letting |
| Listed and heritage buildings | Will need an EPC, removing today’s conditional exemption |
The 2031 standard isn’t law yet. We’re still waiting on the full government response and the secondary legislation that follows it, and there’s no firm date for either. It also isn’t clear how the 1,000 m² threshold will work in practice, for instance where a small suite sits inside a large multi-let building. Our advice is to assume it applies to you until someone tells you otherwise.
Don’t take too much comfort from “where cost-effective” either. In practice it means any measure that pays for itself within seven years will be expected of you. If you want to claim an exemption, the burden of proof sits with you as the landlord, it only lasts five years and it doesn’t transfer to a buyer.
For a large office, our reading of the research is that going from a C to a B is plausibly worth somewhere between 4% and 8% on capital value. On a 700,000 sq ft building, that can run into tens of millions of pounds.
That range is built on a few different strands of evidence.
On rents, UK research by Ke and White found EPC B offices letting at around a 12% premium in regional markets, and just over 11% in London submarkets, compared with lower-rated space. JLL’s work on new Grade A offices in London came up with a similar figure, roughly 10% more rent for buildings rated A or B.
On capital value, JLL’s analysis of Central London deals found that each one-band improvement in EPC added about 3.7% to value and 4.2% to rent.
Then there’s the other side of the coin, which valuers call the brown discount. If you own a building over 1,000 m² that sits at C or D, anyone valuing it today will knock off the cost of getting it to B. A and B buildings, on the other hand, are treated as low-risk institutional stock and priced on keener yields. Capital Economics has linked weaker office values in cities such as Manchester and Newcastle to how few of their offices are rated B or better, and Savills found that 40% of pension funds had seen depreciation of between 21% and 30% over the previous 12 months as a result of brown discounting.
We recently finished a project that took a 700,000 sq ft office building from an EPC C to a B. We don’t share our clients’ valuations, but the sums below give a sense of what’s at stake. We’ve assumed 700,000 sq ft of fully let net lettable space and taken two rent and yield positions, one either side of where the regional market sits today.
| Regional, good secondary | Core regional, prime | |
| Rent (£ per sq ft) | £25 | £35 |
| Annual rent | £17.5m | £24.5m |
| Yield at EPC C | 7.50% | 7.00% |
| Value at EPC C | £233m | £350m |
| Conservative uplift: +3.7% on value | +£8.6m | +£13.0m |
| Central uplift: +4.2% on rent, yield 0.25% keener | +£18.2m (+7.8%) | +£28.2m (+8.1%) |
To put those numbers in context, prime office rents were around £29.50 per sq ft in Liverpool at the end of 2025 and around £45 in Manchester, with regional prime yields at about 6.5% to 7.0%. This is very much as an illustration rather than a valuation. Only an RICS valuer with sight of the leases can put a number on a specific building.
Whichever end of the range a building lands at, doing the work now means you bank the premium and remove the deduction a buyer or lender would otherwise make for 2031. Your tenants’ energy bills come down too, which never hurts when it’s time to talk about renewals.
On the rules as they’ve been announced, a B lodged this year meets the 2031 standard and is valid until 2036. We’d describe that as five years you can be fairly sure of, and probably nearer ten before regulation forces your hand again.
We’re comfortable with the first five years for two reasons. B is the highest standard that has been proposed for commercial buildings, and there’s nothing beyond it on the table. The government has also kept the carbon-based headline rating for commercial EPCs, which most people took as a sign that a change in calculation method shouldn’t suddenly tip compliant buildings into breach.
There are, however, a few things that could cut that time short.
It’s also worth saying that the market may well move faster than the law. Occupiers with their own net zero targets, lenders and buyers are all increasingly looking beyond the legal minimum. The sensible way to use the breathing space a B gives you is to plan your next round of investment around when plant would naturally be replaced anyway, so it arrives as budgeted capital spend rather than a rushed retrofit.
The cheapest way to a B is rarely the one people expect. Commercial EPCs measure carbon, so swapping out old gas-fired or inefficient plant will usually move the score further than reglazing or recladding a building, for less money and a lot less disruption.
The order you do things in matters nearly as much as what you do. This is how we’d normally approach it.
A lot of this work happens in buildings that are occupied, listed, or both, where the test is doing what’s reasonable without damaging protected fabric. At the Liver Building, we replaced gas-fired water heaters with electric units controlled through the BMS, phasing the work so the building never went without hot water. At the Capital Building, Liverpool’s largest Grade A office building, we replaced a 50-year-old water source heat pump system across 13 floors while the tenants carried on working as normal.
Residential lettings are on a different timetable, and in some respects a tougher one. In January 2026 the government confirmed that all privately rented homes in England and Wales will need an EPC C from 1 October 2030. That includes build-to-rent (BTR) apartments and any student studio or flat with its own domestic EPC. Some purpose-built student accommodation (PBSA), though, is certified as a single non-domestic building, and if it’s over 1,000 m² the commercial target of B by 2031 applies instead. It’s worth checking how each of your schemes is certified, because that decides which set of rules you’re working to.
The cost cap works per home. Landlords won’t be required to spend more than £10,000 per property, or 10% of its value if that’s lower, before they can register an exemption. Money spent since 1 October 2025 counts towards the cap, provided it wasn’t spent on fossil fuel heating, and the maximum fine goes up to £30,000 per breach.
Gas is where most schemes will struggle. The new-style domestic EPC looks at fabric performance alongside either the heating system or smart readiness, and the government has proposed that a C shouldn’t be achievable with fossil fuel heating. That leaves first-generation schemes with communal gas boilers, ageing CHP or tired electric panel heaters most at risk. Newer BTR is generally in good shape, with around 97% of recently built rentals already meeting C.
Getting to C early can buy you up to ten years. An EPC C issued under the current system before 1 October 2029 stays compliant until it expires, so upgrading and certifying a scheme in the next three years could see it through to the late 2030s.
The value argument is arguably even stronger here than it is for offices. Across England’s private rented sector, homes rated A or B let for about 8% more than similar D-rated homes, rising to over 13% in the North, and landlords are paying around 12% more to buy them. Living assets also trade on tighter yields. Knight Frank’s October 2026 guide has prime regional direct-let PBSA at 5.75% to 6.00% and Tier 1 regional BTR at 4.75%, which means every £1 of net income is worth somewhere between £17 and £21 in capital value.
In PBSA, rents usually include bills, so it’s the operator who pays for the energy and any saving drops straight through to net operating income. Save £100 per bed per year and, at a 5.75% yield, you’ve added about £1,700 of value per bed, or roughly £870,000 on a 500-bed scheme. Knight Frank says buyers are actively looking for first-generation stock with value-add potential, and expects older, expensive-to-run schemes to fall behind. We’ve worked on more than 12,000 student rooms, including Steelworks in Sheffield, as well as BTR schemes such as Sherlock Quarter in Birmingham. Our advice is to treat heating and hot water plant, end-of-life pod bathrooms and any layout changes as one refurbishment decision. Tackle them separately and you’ll usually end up paying for access, disruption and voids more than once.
If you’ve got a lease event coming up, a building stuck on a C, or a whole portfolio to plan against 2031, we’d be glad to help. We’ve been installing heat pumps since the 1970s, and we deliver EPC upgrades as a complete design and build service, so you deal with one team from the initial assessment through to handover.
If you would like to discuss any of our services, please call 0151 343 1963 or complete the form below and we will be in touch shortly.
