Landlords Awaiting the Non-Domestic MEES Update: What’s Next for Commercial Properties?

Many landlords are now eagerly awaiting an update on the next big development in energy efficiency regulations—Non-Domestic Minimum Energy Efficiency Standards (MEES). While residential landlords are gearing up for higher energy efficiency standards in private rented homes by 2030, commercial property owners and landlords of non-domestic buildings have been left waiting for their own set of rules. So, what's happening with non-domestic MEES, and why are landlords waiting with bated breath for this update?

What Are Non-Domestic MEES?

For context, Non-Domestic MEES are minimum energy efficiency standards that apply to commercial properties, including office buildings, retail spaces, and industrial units. Just like residential MEES, which dictate the minimum energy efficiency rating a rental property must achieve before it can be legally let, non-domestic MEES aim to ensure that commercial buildings meet a certain standard of energy efficiency.

In 2018, the government set out regulations requiring that all non-domestic properties being let or sold must achieve at least an E rating under the Energy Performance Certificate (EPC) system. If a property fell below that rating, it could not be legally rented out or sold, unless an exemption was granted.

However, there is a lot of uncertainty on the horizon for commercial property owners. The government has promised updates to these regulations as part of its ongoing efforts to reduce carbon emissions and meet the UK's ambitious net-zero goals by 2050. As a result, many landlords are anxiously awaiting new developments—specifically, the anticipated increase in the minimum energy efficiency rating for non-domestic properties.

Why Are Landlords Waiting for an Update?

The energy efficiency of non-domestic buildings has become a hot topic in the past few years. With the push toward net-zero emissions, both government and industry stakeholders are increasingly aware of the role that energy-efficient buildings play in reducing overall carbon footprints.

Non-domestic MEES are expected to become more stringent, requiring commercial properties to meet higher energy efficiency standards, potentially raising the minimum EPC rating from E to B in 5 years time (i.e. 2030). While this would lead to significant reductions in energy use, it also means that many landlords and commercial property owners will face the challenge of upgrading their buildings to comply.

For landlords, the stakes are high. Properties that fail to meet the new requirements could face financial penalties, difficulty attracting tenants, and a significant loss in value. In short, the sooner they can prepare for the changes, the better. This is why landlords are eagerly awaiting updates from the government.

The Potential Impact on Commercial Property Owners

1. Cost of Upgrades: Many commercial buildings, particularly older ones, may need substantial work to improve their energy efficiency. This could include installing more energy-efficient insulation, upgrading heating and cooling systems, or implementing renewable energy solutions like solar panels. While these improvements are beneficial in the long run, they can be costly and time-consuming to implement.
2. Tenant Expectations: As businesses and organisations are becoming increasingly conscious of their environmental impact, the demand for energy-efficient, sustainable commercial spaces is rising. Tenants are likely to seek out properties with higher energy ratings, making it important for landlords to stay ahead of the curve.
3. Regulatory Pressure: With government policies continuing to push for a greener economy, landlords who fail to meet the new standards may face fines or restrictions on their ability to let or sell their properties. In addition to this, there may be further pressure to ensure all properties comply with environmental regulations, including future updates to MEES.
4. Long-Term Investment: While upgrading a commercial property can be a financial burden, it can also increase the long-term value of the building. Properties that meet higher energy efficiency standards are likely to be more desirable, reducing vacancy rates and attracting higher-quality tenants.

What Should Landlords Be Doing in the Meantime?

While we await further guidance from the government, non-domestic property owners can take some proactive steps by consulting energy experts!

• Speak to us- Consider bringing in energy efficiency professionals (like us) who can offer insight into how best to improve your property’s energy performance. This can help you make informed decisions about which upgrades will offer the best return on investment.
• Stay ahead- If you or your team are looking to stay ahead of the changes, then give us a call on 01524 548313! We’re here to help you navigate the upcoming regulations and ensure your properties meet the new standards smoothly.

Let’s hope the much-anticipated update comes soon, giving landlords the clarity and guidance they need to ensure their properties meet the new standards. ????