The government has issued an interim response on the changes to MEES in England and Wales, confirming its intention to implement the following:
- From 2031, it is proposed that all private rented buildings over 1,000 square metres in England and Wales will need to reach a higher standard of energy efficiency of EPC B, where cost effective
- The intention is for buildings below 1,000 square metres to continue to be subject to the current minimum standard of EPC
- The previously proposed interim EPC C milestone for 2027 will not be taken forward, giving landlords and tenants more time to improve the efficiency of their buildings in a way that suits their buildings and lease agreements
The government's stated aims here are twofold:
- The focus action where it delivers the greatest benefit – helping tenant's in the largest rented buildings save energy and reduce bills by £360 million per year by 2031 (a figure that has been estimated using the government's event simulation model). This reduction will then lower energy demand from commercial buildings from the grid.
- Additional flexibility is given to SMEs and high street landlords of smaller buildings to upgrade their buildings over time.
As we increasingly see green clauses coming into leases this may seem to be a reactive move from the government, with secondary legislation following the movement already seen in the big box sector. If you would like advice on MEES and the impact on landlord and tenant issues, both our real estate and energy team are happy to assist.
