Yesterday, 18th June, the government confirmed something the property industry has been waiting on for years. From 2031, all privately rented non-domestic buildings over 1,000 square metres in England and Wales will need to reach EPC B, where cost effective.

Buildings under that threshold stay at the current EPC E minimum. The previously proposed interim EPC C milestone for 2027 has been dropped, and the existing flexibility mechanisms, including the seven-year payback test and exemptions, stay in place.

It's worth being clear on what this is and isn't. This is an interim response that closes the consultation period and confirms the government's intention. It still needs secondary legislation to pass through Parliament before it has full legal force. But the target is now clear, and in my view that's enough to get the industry moving again.

See the full Government announcement here

Here's my honest take on what it means for MEES compliance, and what you should do about it.

Two choices

Put simply, waiting a few years or acting now are the choices. Getting a building to EPC B is no mean feat. Some will take a lot of planning, utilising all the data you have at your disposal, finding it in the first place is enough of a challenge, then working out how each building is actually performing, deciding which measures to use, and knowing which buildings fall in and out of scope so you can build a route map. If you don't start that now, you're putting yourself in a  dangerous place.

The biggest consequence of waiting is the stranded asset. Imagine reaching 2031 a long way off EPC B and being unable to let your unit. That's serious financial trouble. And the closer we get to the deadline, the worse the panic and the backlog become, backlogs in EPC assessments, in understanding what to do, in planning construction, in actually delivering the measures. The smart move is to get ahead of it now with a quality, costed plan.

Does the longer runway actually help?

The 2027 target was simply too close. You were never going to get every building over 1,000 square metres up to EPC C in a year, it just wasn't going to happen, so dropping it was the right call. The risk now is that 2031 feels far enough away to ignore. I don't think anyone sensible who owns lettable buildings will make that mistake, because the financial penalty for missing the target is too big. If anything, I think this gives the industry the boost it needs to start moving properly.

If I had a large estate, I'd start by working out the immediate opportunities and building a decarbonisation roadmap around the most cost-effective route to compliance. Some of the cheapest measures are around controls and how people use buildings, but those savings are harder to guarantee, and they don't always map neatly onto the EPC scoring criteria. So, you have to look at every measure available across the whole estate and work out which ones genuinely improve your EPC rating while also cutting energy and improving how tenants use the space.

The seven-year payback test changes everything

The retained seven-year ROI test is fascinating, because it will strip a huge number of measures out of the average plan. Switch from gas to a heat pump, for example, and there's a high chance the payback runs well beyond seven years. Replace windows and you'll often blow past it too. A lot of physical measures simply won't qualify on their own.

This is exactly why a whole-building view of energy efficiency ROI matters. Ideally you want to look at every measure, the ROI of each one individually, and the combined ROI for the building. If some measures have a very long payback, you can take them out and watch the building's overall payback period drop right down. Most buildings can get under the seven years, but not every measure within them will. You have to look at the measures together, as a whole, not in isolation. This is why we built OptimiseAI as MEES compliance software, not just an energy report.

And there's an important nuance the dropped EPC C milestone creates. If your building is an F and a full route to B doesn't pay back, getting it to a D still delivers a large amount of carbon and energy savings. I'd argue the government risks losing those opportunities by not keeping an interim step. We can still show you what's achievable and worthwhile, even when a B isn't.

EPC is a start, but should lead to a more helpful efficiency action plan

This is the part I really want estate owners to hear. An EPC is a theoretical measurement of how a building should perform; it isn't based on reality. A building rated B can easily perform like a C or D if it isn't being used effectively. What OptimiseAI does is compare the EPC against how your building is actually performing, using live data from the meters and the building physics, turning a static certificate into commercial property energy optimisation you can act on.

So, there are two jobs here. One is meeting the government standard. The other is genuinely reducing building energy costs and carbon in the real building. I'd suggest everyone looks at both. The most enlightened estate owners are already doing this, because they want to cut energy and costs for their tenants. Legislation exists to bring everyone else along. The EPC is a blunt instrument, but it's getting people to think, plan, and act at scale, and that's what generates the savings.

Triaging an estate with dozens of buildings

A large estate will have some buildings over the 1,000 square metre threshold and some under. Because of our mapping technology, OptimiseAI can tell you within seconds which buildings are in scope, and which are out, purely on size. Within minutes we can tell you their current EPC ratings, how we believe they're performing on the building physics model, and, if we connect to the smart meter, how they're performing in reality. Then we suggest the best route to EPC B and the payback period, property energy efficiency software doing the triage that used to take consultants weeks.

The real problem at scale is surveying. If you have hundreds of buildings, surveying them all to build a plan takes weeks, months, maybe years, and can cost hundreds of thousands of pounds. My advice: do a high-level assessment in OptimiseAI first, build a plan that's defensible at board level, identify funding grants, gain agreement and only then run targeted surveys. You still need surveys for the EPC itself but you can be surgical about it rather than spending blindly across the whole estate.

Do the five priorities point to the same answer?

We let customers prioritise their plan by cost, timing, energy efficiency, carbon reduction, or energy cost savings, and these can point to very different upgrades. The EPC calculation methodology (SAP in housing, SBEM in non-domestic) has historically weighted some measures in ways that don't reflect their real-world value. So, some measures give you the best bang for buck on EPC score, while others give you the biggest energy, carbon and cost savings in reality. Sometimes they're the same. Often, they're not. We can show you both.

Is the £360 million in savings realistic?

The government estimates up to £360 million a year in tenant bill savings by 2031. The biggest savings and the best paybacks usually come from small, affordable measures, controls and how buildings are actually used, some of it free or very cheap. The catch is we're human and we don't all behave the same way, so those savings are harder to guarantee.

The more reliable route is static measures, insulation, windows, gas-to-heat-pump, which are more obvious but more costly, and frustratingly it's often harder to earn EPC credits for the softer measures. That tension pushes people toward physical measures.

But here's the upside. Done properly, this isn't an onerous piece of legislation, it's an opportunity to look hard at your estate and find where efficiency gains can happen most rapidly and cost-effectively. It's the moment to turn MEES compliance into a genuine building decarbonisation strategy.

The government's savings figure is based on modelling, in the same way EPCs are based on modelling, not reality. That's precisely why understanding your actual smart meter data matters. The EPC gets us moving in the right direction, but it's nowhere near the end of the journey. It's virtually the beginning.

Three things to do tomorrow morning.

If you're a sustainability leader, asset manager or asset owner, here are the three actions I'd take:

1. Work out which buildings are in scope. It's the cheapest, quickest thing you can do, and it tells you the size of the task.

2. Understand your current EPC ratings across the estate.

3. Make a plan for how you'll assess the estate and find the best route to MEES compliance.

Think of OptimiseAI as your stage zero, the quickest, cheapest, easiest way to get a view across your estate, see where you are now and where you can get to at a plan level, before spending large sums on surveys and measures.

You can check your own buildings on our EPC Map and see exactly which ones are in scope or take the interactive demo to see how fast this can be.