In the Know: Understanding the proposed domestic EPC and MEES reforms

The Government is proposing stricter Minimum Energy Efficiency Standards (MEES) in the private-rented sector, along with significant reforms to the Energy Performance Certificates (EPCs) regime.

This means landlords are facing a number of potential changes which will require careful planning in terms of what to invest in energy efficiency improvements and when. The proposals may also result in some properties falling within the EPC regime for the first time and could mean changes in how often EPCs need to be carried out.

The Government recently consulted on changes to MEES which apply for the private rented sector in England and Wales. This consultation closed on 2 May 2025. A consultation on reforms to the Energy Performance of Buildings regime, which closed in late February 2025, includes proposals to overhaul the metrics used to produce EPCs.

The two consultations dovetail as the EPC is used as the basis of the regulatory requirements under MEES.

What MEES reforms are being proposed?

The Government had previously indicated that landlords will need to ensure any let residential property has a minimum EPC rating of C by 2030, but the consultation gives more detail on the proposed changes.

It seeks views on whether the higher standard should apply for new tenancies from 2028 and for all tenancies from 2030.

It suggests the cost cap – which is the maximum amount that landlords are required to invest to meet the standards – should rise from its current level of £3,500 to £15,000 (both including VAT). After this level has been reached, it would be possible to register for a 10-year exemption (double the current exemption period) to continue to let the property even if it does not reach the required standard. An affordability exemption, that would lower the cost cap to £10,000 for properties that generate a lower level of rent, is also under consideration.

The other significant change would be to set future MEES against a combination of new EPC metrics. The Government’s preference is to move away from energy cost being the main focus of the EPC (see explanation below), to fabric performance being the primary standard. This would make measures such as cavity wall insulation, solid wall insulation, loft insulation, underfloor insulation, draught proofing, and double glazing for windows the first priority.

Views are being sought on whether the current list of MEES exemptions is sufficient or whether there need to be any amendments.

Why are the EPC reforms being proposed?

At present, EPCs display various metrics about a building’s energy performance, but the headline metric for domestic buildings is the Energy Efficiency Rating (EER). This is calculated using modelled energy costs per square metre based on standardised heating patterns, temperatures, and fixed fuel price assumptions.

However, there has long been concerns about EPCs being flawed. For example, for the past few years the methodology has still assumed relatively high costs for electricity, despite the growth in renewable sources, so even low-carbon electric heating systems often result in poor EPC ratings. However, an update to the methodology is being rolled out on 15 June 2025 which will ensure that assessments are based on the latest data. This means electric heating systems may see improved ratings. The new guidance will also offer a more comprehensive assessment of homes using renewable energy technologies.

The government is proposing to use multiple metrics on EPCs to provide a more complete representation of building energy performance. The metrics are:

• Energy cost: helping individuals understand the financial implications of a building’s energy efficiency and make informed decisions about potential improvements.
• Carbon: an estimate of the carbon emissions arising from the energy used in the building.
• Energy use: offering insights into overall energy consumption and identifying areas for energy efficiency improvements.
• Fabric performance: assessing the thermal performance of a building’s envelope and promoting the importance of well-insulated, comfortable, and energy-efficient spaces.
• Heating system: providing information on the efficiency and environmental impact of a building’s heating source and encouraging the adoption of cleaner heating technologies.
• Smart readiness: assessing a building’s potential to integrate smart technologies that can optimise energy consumption and the ability of consumers to benefit from cheaper smart tariffs.

In domestic EPCs, the Government suggests fabric performance, heating system, smart readiness and energy cost as the headline metrics, with the other metrics provided as secondary information.

Under these alternative metrics, the focus would be on improving the building’s heat retention, reducing the energy required to operate the building’s heating systems, and enabling the occupier to optimise their energy use, to maximise the overall energy efficiency of the building and reduce its running costs.

Will the timing of EPCs change?

At present, an EPC is valid for 10 years. However, a valid EPC is currently only required at the point of build, sale, or grant of lease. Therefore, many EPCs do not actually need to be renewed when their validity period ends.

The consultation asks for views on changing the validity period to a choice of less than two years; two years; five years; seven years or leaving things as they are. It suggests if the validity period is to change a transition period could apply which would mean all existing EPCs would remain valid until the end of their existing validity period.

It is also looking at whether a new trigger point should apply, so EPCs for rented properties would need to be updated when their validity period ends even if the tenant remains in place.

The MEES consultation proposes that landlords who meet a standard of C using the existing EER style of EPC would be regarded as being compliant with future MEES until the EPC expires or is replaced. However, once the higher MEES standards are in effect, landlords needing to take action to get to a C rating would first need to commission a new EPC.

Are there changes to EPC exemptions?

Given many landowners operate holiday lets and/or have heritage properties on their farms and estates, there are a couple of additional proposals that have implications for the rural sector.

First, the EPC consultation suggests that current arrangements for short-term rental properties should be revised. This would effectively mean that EPCs would be required for all holiday lets.

Second, currently buildings officially protected as part of a designated environment (i.e a conservation area) or because of their special architectural or historical merit (i.e listed) are not always required to have an EPC ‘in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance’. This can be a source of confusion, as it seems to imply that an EPC may not be necessary. However, it is not an automatic exemption. Essentially, you need to carry out some level of energy assessment in order to know if the improvements in an EPC would ‘unacceptably alter their character or appearance property.’ The requirement also only applies to rental properties.

The proposal in the EPC consultation is that the system is simplified, so that all such buildings would need an EPC in the future.

However, it acknowledges that some of the generic EPC recommendations will not be appropriate for heritage buildings and proposes finding ways to tailor them better. Property owners should also be able to take advantage of any relevant exemptions available under MEES.

When are the changes likely to take effect?

It is anticipated that any changes to the EPC metrics will be introduced in the second half of 2026. The Government will also lay secondary legislation to raise MEES in the sector in 2026. Transitional arrangements will be put in place to address any practical problems caused if these two steps do not align.

Is there anything landlords can be doing now?

There is no one-size-fits-all solution, and every property should be assessed on its own merits.

An EPC assessor can run a programme to show the most cost-effective combination of improvements needed to reach a C-rating. If the recommended works are relatively minor – or can be phased in over a few years – it may make sense to act now. Early improvements could future proof the property for a 10-year period and strengthen its appeal to tenants.

However, where the required upgrades are more extensive and expensive, it may be more strategic to wait until the final legislation is confirmed, so that any expenditure incurred can be put towards the new MEES cost cap. In the meantime, landlords should monitor developments and keep an eye on emerging technologies that could offer better solutions or savings.

A strategic, case-by-case approach is key. If a property is vacant, for example, it can be an ideal time to complete upgrades with minimal disruption. As a general guide, any work done should focus on energy efficiency. Improving this should benefit EPCs, whatever the outcome of the consultation and it may improve rental values too.

This article forms part of our ‘In the Know’ series which sees Strutt & Parker experts share insight and advice to enable farms and estates to improve their business resilience, both from an economic and environmental perspective. Please get in touch if you would like to know more.