Widespread EPC Shortfalls in Major UK Cities

Research conducted by the British Property Federation (BPF) has highlighted a significant energy performance challenge facing commercial landlords across England’s largest cities. The study examined offices, retail, and industrial properties in London, Birmingham, Bristol, Leeds, Liverpool, Manchester, and Newcastle. It found that 81% of commercial buildings currently have an Energy Performance Certificate (EPC) rating below B. This equates to roughly 190 million square metres of floorspace potentially exposed to future regulatory risks.

Only a small fraction of buildings—3%—achieve the highest EPC rating of A, while a further 16% reach a B rating. Manchester leads the group with 22% of its commercial properties rated A or B, closely followed by London at 21%. However, across all seven cities, improvements over the past year have been minimal, with the proportion of buildings rated B increasing by only one or two percentage points.

Government Delays Impacting Landlords and Tenants

Rob Wall, assistant director at the BPF, criticised the government’s lack of clarity on future minimum energy efficiency standards for the non-domestic private rented sector. He stated, “The Warm Homes Plan has left commercial landlords in the dark and out in the cold. We have been waiting for five years for a decision on future minimum energy efficiency standards for the non-domestic private rented sector. It is beyond belief that Ministers have kicked the can down the road once again.”

Wall emphasised the consequences of this delay, noting that “the lack of any real policy development under this government on upgrading commercial property is leaving commercial tenants with higher energy bills and undermining efforts to decarbonise our buildings.” The absence of a formal government response is also making the proposed 2027 and 2030 energy efficiency targets increasingly unrealistic, given the scale of work and long lead times required for major commercial retrofits.

Implications for Commercial Landlords and Letting Agents

The uncertainty surrounding minimum energy efficiency standards is causing hesitation among commercial landlords and investors, delaying essential upgrades to existing stock. For landlords, this means a growing risk that their properties could become unlettable if they fail to meet future regulatory requirements. Tenants may also face higher energy costs as inefficient buildings continue to operate without improvements.

Given the long timelines involved in retrofitting commercial properties to meet higher EPC standards, landlords are advised to monitor government announcements closely and consider proactive energy efficiency measures where feasible. Early action could help mitigate the risks of non-compliance and maintain property attractiveness in a market increasingly focused on sustainability.

Outlook and Next Steps

The BPF warns that without swift government action to clarify and enforce minimum energy efficiency standards, the commercial property sector will struggle to meet ambitious decarbonisation goals. This delay threatens to stall progress on reducing carbon emissions from buildings and could have wider economic impacts on the commercial rental market.

Landlords and agents should prepare for potential regulatory changes and engage with energy efficiency initiatives to future-proof their portfolios. Staying informed about policy developments and seeking expert advice on EPC improvements will be essential in navigating this evolving landscape.

Suggested internal link anchors

• Energy Performance Certificate (EPC)
• commercial property investment
• minimum energy efficiency standards
• non-domestic private rented sector
• commercial property retrofits
• decarbonisation of buildings
• energy efficiency regulations
• commercial landlord responsibilities
• property lettability criteria
• UK commercial property market

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/