Commercial EPC rules after June 2026: what buyers of let shops and units need to know

By Kunal Mishra, founder of YieldBellPublished 18 October 2026 · Last checked 18 October 2026

For 5 years, owners of rented commercial property have been told to plan for EPC B by 2030.

On 18 June 2026 the government changed course. It published an interim response on the minimum energy efficiency standards (MEES) for rented non-domestic property in England and Wales (GOV.UK). The plan is now split by size.

The rule today: EPC E

In England and Wales, since 1 April 2023, a landlord must not continue to let a non-domestic property with an EPC below E, unless a valid exemption is registered. The rule has applied to new lets and renewals since 1 April 2018 (GOV.UK landlord guidance).

So a shop rated F or G cannot lawfully be let without an exemption. That has not changed.

The rule does not cover every lease. GOV.UK says it does not apply to tenancies of 6 months or less (with some exceptions) or to tenancies of 99 years or more.

What changed in June 2026

The interim response says 3 main things.

1. Larger buildings: EPC B by 2031. The government wants "all private rented buildings over 1,000 square metres in England and Wales" to reach EPC B by 2031, where cost-effective.

2. Smaller buildings: stay at EPC E. It intends for "buildings below 1,000 square metres to continue to be subject to the current minimum standard of EPC E." No later deadline was given for them.

3. No 2027 step. The earlier plan had an EPC C milestone in 2027. The response says "the previously proposed interim EPC C milestone for 2027 will not be taken forward."

The existing safety valves stay. The response says "existing flexibility mechanisms, including the 7-year payback test and exemptions, will remain in place."

It is not law yet

This is a statement of policy. The response says the EPC B change "will only take effect following the successful passage of secondary legislation through Parliament." A fuller government response is expected later. Law firm Burges Salmon describes the same position (Burges Salmon).

The old EPC B by 2030 date was also only ever a proposal. It came from a 2021 consultation, not from law (GOV.UK, March 2021).

So treat 2031 as likely, not certain. Details such as how the 1,000 square metre line is measured are still to come.

Why the size split matters to private buyers

1,000 square metres is about 10,764 square feet. That is a large building for a private investor.

Most of the lots private buyers look at are far smaller. The Association of Convenience Stores groups UK convenience stores into size bands that stop at 3,000 square feet, which is under 280 square metres (ACS Local Shop Report 2026). A typical high street shop, a single small industrial unit or a café is also likely to be under the line. Always check the actual floor area in the EPC or the measured survey.

For these smaller buildings, the June response removes the pressure to reach C by 2027 or B by 2030. The test stays at E.

For larger buildings, such as a multi-let office, a big retail warehouse or an industrial estate let as one building, the B target now has a firmer date.

What it does not change

The E rule still bites. A rented shop rated F or G is a problem today, whatever its size.

Exemptions do not pass to you. GOV.UK says that if a let property is sold, the exemption stops being effective. The new owner must improve the property or register a new exemption if one applies. A seller's registered exemption is not a guarantee for you.

There is a short grace period. A new landlord can register a temporary exemption that lasts 6 months from the date they became the landlord (GOV.UK).

EPCs expire. An EPC for a non-domestic building is valid for 10 years, or until a newer one is lodged (GOV.UK EPC guide). An old certificate may not reflect the building today. Look the property up on the national EPC register and note the date.

Scotland is different. The MEES rules above cover England and Wales. In Scotland, buildings over 1,000 square metres need an "action plan" when they are sold or let to a new tenant, under separate regulations (Scottish Government; SSI 2016/146).

What to check before you offer

1. Find the EPC. Note the rating, the date and the floor area. If the brochure does not show it, search the register by postcode.
2. Check the floor area against 1,000 square metres. If the building is near the line, ask how it was measured.
3. If the rating is F or G, ask why it is still let. Ask for the exemption record and when it ends. Remember it will not pass to you.
4. If the rating is E or D on a large building, price in the work. Ask a surveyor what reaching B might cost, and whether the 7-year payback test would apply.
5. Read the lease. Check whether the tenant must allow works, and who pays. Ask your solicitor.
6. Look at the recommendations. The 7-year payback test is based on the improvements recommended for the building (GOV.UK). They give a rough idea of what would be needed.

Has the market noticed?

Pricing has many drivers, and it is too soon to say how much of any change comes from this update. Knight Frank's October 2026 guide shows secondary offices in regional cities at 11.00% or more, and in South East towns at 11.50% or more, unchanged on the year (Knight Frank, prepared 6 October 2026). Borrowing costs have also risen. The same guide shows the 10-year gilt yield at 5.42% on 6 October 2026, up from 4.79% a year earlier.

Values can fall as well as rise, and rules can change again. Check the position on the day you buy.

Next steps

Use our yield calculator to see how the cost of improvement works would change your yield. Add your estimate of the works to the fees box, as a percentage of the price.

If you would like YieldBell to email you the day a let property that fits your brief is listed, book a 30-minute call.