EPC reforms and MEES for private-rented property confirmed

Alongside its warm homes plan, the government issued its partial response to an earlier consultation on EPC reform in England and Wales (82-page / 638KB PDF).

EPC is a reference to energy performance certificates. The government open a consultation on EPC reform in December 2024.

In its new paper, the government confirmed that domestic EPCs will be reformed to have four headline metrics. These will be fabric performance, heating system, smart readiness and energy cost. Under the reforms, EPCs will also include secondary metrics, these being energy demand, which will be based on modelled energy consumption, and a carbon metric. The government’s intention is for these new form domestic EPCs to be in use from October 2026, which it acknowledges is ambitious – it said it will “work with industry to build a shared implementation plan and test assumptions”. It will also retain the energy efficiency rating (EER) metric on new form domestic EPCs for a period of time to support transition provisions.

For non-residential property, the government confirmed that the carbon metric will remain the only headline metric on EPCs.

On broader EPC reform issues which cover both residential and non-residential property, the government confirmed that the validity period for existing and for new form EPCs will be 10 years and that EPCs will be required not only, as now, on the sale, letting and construction of properties but also at the point of marketing property. It also confirmed proposals contained in the consultation to extend requirements for EPCs to heritage properties, short term rental properties, and to houses in multiple occupancy (HMOs) at the point a single room is let.

The one issue which has not been confirmed in the partial response is whether there will be a new requirement for an EPC at all times when the property is let. On this, the government said there will be further engagement with landlord groups and that the position will be confirmed in its final response later this year.

The government has also opened a fresh consultation (29-page / 382KB PDF) on the Home Energy Model – the new methodology that will apply to EPC assessments – which runs until 18 March 2026. The government intends to respond to this consultation and issue its full response to the consultation on EPC reforms later this year.

With its Home Energy Model consultation, the government has invited views on how the four headline metrics should translate into new EPC ratings bands. It has proposed that each metric, except the energy cost metric, be banded A-G, with the cost metric being the estimated cost of energy bills in pounds sterling. Regarding the heating system metric, it has proposed that it not be possible to achieve an EPC C with fossil fuel heating. In relation to the smart readiness metric, it has further proposed that a C rating require microgeneration with either a smart meter or some level of energy storage.

Also alongside the warm homes plan, the government issued its response to a February 2025 consultation on increasing ‘minimum energy efficiency standards’ (MEES) for domestic private rented property. In the document, the government confirmed that the required minimum standard will be an EPC C for all tenancies from 1 October 2030 – it had originally proposed to introduce this requirement for new tenancies from 2028. Some landlords may be eligible for an exemption. The government said the EPC C requirement will apply “across two metrics” – these will be the fabric performance headline metric in new form EPCs and either the smart readiness metric or the heating system metric on new EPCs.

The government said: “Setting a dual metric standard against new EPC metrics and allowing landlords the discretion between meeting the heating system standard and the smart readiness standard, ensures the regulations deliver fuel poverty alleviation and bill savings to a similar degree to an EPC C standard against the existing EPC metric. However, the key benefit of utilising the dual metric approach using new metrics, is that it resolves the current issue whereby consumers are penalised for doing the right thing by installing low carbon heating systems, such as heat pumps, without punishing gas boiler users or forcing landlords to replace a working heating system.”

“Allowing landlords discretion to choose between which secondary metric to meet, gives landlords the option to either retain their property’s existing heating system and deliver bill savings for their tenants via alternative smart measures, such as solar panels, or to take advantage of the Boiler Upgrade Scheme (BUS) and receive funding to install a heat pump. Both options are valid routes to compliance with MEES,” it added.

Lower cost caps than had been originally proposed have been built in alongside the MEES in response to concerns raised about the affordability of applying upgrades. The maximum expenditure landlords will need to make to achieve the new minimum standard will be £10,000 – not £15,000 – or, if lower, 10% of the property value. If, after this, the property does still not meet the minimum required standard, a ‘cost cap’ exemption can be registered. The cost cap will not increase annually in line with inflation. However, the cap will be reviewed every five years to account for inflation and other factors, but there will be no such review until after 1 October 2030.

The available exemptions will be extended. Acknowledging concerns that some improvement works may not be suitable for an individual property, particularly in the case of heritage properties, the available exemptions will be extended to include a “negative impacts” exemption where landlords can evidence that relevant works would negatively impact a property. Guidance on this is to be provided.

In addition, a solid wall exemption will be introduced, which will be available where the landlord’s preference is not to install solid wall insulation. According to the response, the government is also considering a new portfolio-based exemption for landlords with large portfolios which “could allow larger landlords to utilise the total sum of the combined cost caps for their individual properties, instead of being required to meet the cost cap per individual property”.

Both the cost cap and the negative impact exemptions will be valid for 10 years whilst all other exemptions will continue to be valid for only five years.

MEES will not be extended to short term lets.

A private rented sector (PRS) database is being established under the Renters Reform Act 2025 which is expected to aid MEES enforcement. In its response paper, the government has now confirmed the maximum fine per breach of the regulations will be increased to £30,000.

Transitional provisions have been confirmed, which will mean that where landlords have achieved an existing form EPC C rating before 1 October 2029 this will be considered compliant with the new MEES Regulations until that EPC expires. This standard can be achieved either via an old form EPC or via the EER metric on new form EPCs, which will continue to appear during the transition period. To encourage early improvement works, expenditure between 1 October 2025 and 30 September 2029, other than on fossil fuel heating, will count towards the cost cap exemption.

Pending the new minimum standards applying from 1 October 2030, the minimum requirement of an EPC E rating continues to apply and can be met by a previous EPC E rating where a new form EPC with a rating below EPC E is in force.

Where an EPC C based on an EER rating has not been achieved by 1 October 2029, a landlord will have to commission a new form EPC if it doesn’t have one, prior to improvement works based on the new EPC metrics for MEES purposes.

Property law expert Siobhan Cross of Pinsent Masons, who specialises in supporting clients with the decarbonisation of their real estate, said: “The responses to these consultations are very welcome. The confirmed positions are well thought through and strike a sensible balance between the need to make domestic EPCs fit for purpose and to use them to drive the improvements needed to deal with the dual challenges of fuel poverty and the climate crisis.”

“Whilst the government is right to focus on energy use in domestic property, which is responsible for 66% of the ‘around one fifth of UK emissions’ from buildings, it will be deeply frustrating for the commercial property sector that the warm homes plan has failed to provide certainty on the trajectory for MEES for commercial rented property,” she said.

The intention is that legislation for the new MEES standards will come into force 2027.

In relation to MEES for social housing, a response has not yet been published to the July 2025 consultation that proposed social rented homes should also be required to have the same level of minimum EPC C rating by 2030. The government has said a response to this consultation will be published “in early 2026”.