The UK government’s approach to energy efficiency standards for rental properties has seen major shifts in recent years, creating uncertainty for landlords. In a key update, the previously planned requirement for domestic rentals to reach EPC rating C by 2025 (and commercial by 2027) was scrapped in September 2023, keeping the current minimum at EPC rating E – for now.
Looking ahead, a new target has been proposed: all rental properties must reach an EPC rating of C by 2030. This extended deadline offers landlords more time, but the pressure to plan and budget for energy improvements remains.
Understanding these changes is essential for both residential and commercial landlords to stay compliant and financially prepared. In this guide, we break down what’s changed, what hasn’t, and how you can proactively position yourself for compliance and long-term savings.
What Are EPC Ratings & Why Do They Matter?
An Energy Performance Certificate (EPC) is a document that measures a property's energy efficiency and carbon emissions, rated on a scale from A (most efficient) to G (least efficient). It also includes tailored recommendations on how to change EPC rating results, along with the potential rating your property could achieve after improvements.
A qualified energy assessor conducts both internal and external inspections to produce the certificate. In the UK, an EPC is legally required whenever a property is built, sold, rented, or significantly altered. It remains valid for 10 years and must be made available to prospective buyers or tenants.
Current EPC Requirements for Landlords: MEES Regulations
The Minimum Energy Efficiency Standards (MEES) regulations, introduced in 2015, aim to raise the energy efficiency, comfort, and overall quality of privately rented homes and commercial properties in England and Wales. These regulations are part of the UK’s broader strategy to reduce carbon emissions and tackle fuel poverty.
Under MEES, landlords must ensure their properties meet a minimum EPC rating before they can be legally rented out.
The regulations have been introduced in phases:
- April 2018: It became against the law to grant new leases (including renewals and subleases) for residential or commercial properties with an EPC rating of F or G, unless a valid exemption is registered.
- April 2020: These restrictions were extended to all existing residential leases, making it illegal to continue letting homes with an EPC rating of F or G.
- April 2023: The same rules were applied to all existing commercial leases, making it illegal to continue letting commercial buildings with an EPC rating of F or G.
The updates made in 2020 and 2023 mean that any leases that were previously taken out legally are now non-compliant. As it stands today, all rental properties (residential and commercial) must have a minimum EPC rating of E.
EPC Changes 2025: Key Updates You Need to Know
Abandoned Changes to EPC for Rental Properties & Current Standards
The previous Conservative government had proposed stricter energy efficiency targets for rental properties. The planned rental EPC rating changes included:
- Residential Properties: A minimum EPC rating of C by 2025 for new tenancies and by 2028 for all tenancies.
- Commercial Properties: A phased trajectory aiming for EPC B by 2030, with an interim target of EPC C by 2027.
However, in September 2023, the government formally abandoned these proposals, citing concerns about the financial pressure on landlords to make significant energy efficiency upgrades within a short timeframe.
As a result, the current legal requirement remains unchanged: all privately rented residential and commercial properties must have a minimum EPC rating of E, unless a valid exemption applies.
Looking Ahead: Proposed Changes
The current UK government has signalled its intention to revisit and strengthen energy efficiency standards. A new consultation is expected to be launched, aiming to address gaps in previous policies and explore more ambitious targets for both private and social rented sectors by 2030.
The forthcoming proposals are expected to:
- Improve the quality & comfort of rental homes, making them more affordable to heat & maintain
- Support national efforts to reduce fuel poverty, potentially benefiting over a million renters
- Contribute to the UK’s broader climate goals, including the target of net-zero carbon emissions by 2050
While details are still emerging, landlords are encouraged to start considering long-term improvements to their properties in anticipation of future regulatory changes.
The Impact of EPC Changes for Landlords
Although the UK government has scrapped the proposed requirement for all newly rented properties to have a minimum EPC rating of C by 2025, existing obligations under MEES still apply. Landlords must continue to ensure their residential and commercial properties in England and Wales achieve at least an E rating before they can be legally let.
MEES regulations are enforced by local authorities, who have the power to investigate suspected non-compliance. If a breach is confirmed, landlords can face financial penalties of up to £5,000 per property or 10% of the property’s rateable value (whichever is greater), capped at £50,000.
While the immediate pressure of the 2025 target has eased, landlords should not become complacent. The current government remains committed to improving energy efficiency across the private and social rental sectors, and new regulations are anticipated from 2030 onwards. For landlords, this might mean:
- A mandatory minimum EPC rating of C for all rental properties
- Stricter enforcement & compliance measures
- Increased penalties & restrictions on letting substandard buildings
Failing to act now could lead to significant retrofit costs later, especially as demand for tradespeople and materials is expected to rise closer to any future deadline. Taking a proactive approach not only helps spread the cost of upgrades over time but can also make properties more attractive to energy-conscious tenants and improve resale value.
Check If Your Residential Property Is Subject to MEES
To determine whether your residential property falls under the MEES regulations, consider the following questions:
- Is your property let under an assured, regulated, or agricultural domestic tenancy?
- Is your property legally required to have an EPC? (If your property has been marketed for sale or rent, or significantly modified in the past 10 years, it’s likely legally required to have an EPC.)
If you answered yes to both questions, and your property has an EPC rating of F or G, you are legally required to improve its energy efficiency or register a valid exemption to comply with MEES.
If you answered no to one or both questions, your property is not currently subject to MEES, and you may continue to let it even if it has an EPC rating of F or G. See full guidance on the minimum EPC requirements for residential properties on the government website.
Check If Your Commercial Property Is Subject to MEES
To determine whether your commercial property falls under the MEES regulations, consider the following questions:
- Is your property considered a non-domestic dwelling? (This includes most commercial and public sector buildings, such as offices, retail units, industrial properties, healthcare facilities, and educational buildings.)
- Is your property legally required to have an EPC? (If your property has been marketed for sale or rent, or significantly modified in the past 10 years, it’s likely legally required to have an EPC.)
- Is the lease granted for a fixed term between 6 months and 99 years?
If you answered yes to all the questions, and your property has an EPC rating of F or G, you are legally required to improve its energy efficiency or register a valid exemption to comply with MEES.
If you answered no to one or all the questions, your property is not currently subject to MEES, and you may continue to let it even if it has an EPC rating of F or G. See full guidance about the minimum EPC requirements for commercial properties on the government website.
When Do EPC Regulations Change & How Can Landlords Prepare?
Residential and commercial EPC changes are anticipated as part of the UK government’s ongoing efforts to improve energy efficiency across the property sector. Current proposals suggest that by 2030, all rental properties may be required to meet a minimum EPC rating of C.
While these changes are still under consultation, landlords should begin preparing now to stay ahead of future compliance requirements, enhance property value, and attract tenants.
Steps you should take as a landlord in 2025:
- Review Your Current EPC Rating: Check or renew your EPC to understand your property’s current status and where improvements are needed.
- Plan for Strategic Updates: Identify cost-effective improvements, such as upgraded insulation, smart heating controls, LED lighting, and efficient boilers or heat pumps.
- Budget for Gradual Improvements: Use the longer timeframe to spread out upgrade costs and avoid last-minute financial strain as the 2030 deadline approaches.
- Stay Informed: The government will release more guidance following its consultation period. Staying informed will help you align your plans with future legal requirements.
- Explore Financing Options: Keep an eye on potential government grants, incentives, or green financing options that may help fund your energy efficiency upgrades.
Contact ACI Reports for Expert EPC Services & Consultancy
With major EPC changes expected by 2030, now is the time for landlords to plan ahead and avoid unexpected costs or compliance issues. Proactively investing in energy efficiency helps safeguard your property assets, ensures regulatory compliance, and boosts your property's appeal to prospective tenants.
At ACI Reports, we provide expert EPC surveys and consultancy services tailored to the needs of commercial and residential landlords. Our EPC report includes:
- A concise summary of priority actions you can take immediately to improve energy performance
- A comprehensive list of all recommended measures, including estimated cost & impact
- Clear guidance to help you decide which upgrades offer the best return on investment
Whether you manage one property or a larger portfolio, our team can help you make informed, cost-effective decisions that future-proof your rental properties.