Reforming the Energy Performance of Buildings regime - New UK Government Proposals

1.  Background

In March 2026, the UK Government published a partial response to its Consultation on “Reforms to the Energy Performance of Buildings regime.” The latest Government publication is part of a wider set of proposals aimed at improving Energy Performance Certificates (“EPCs”) and tightening minimum energy performance standards for domestic and non-domestic properties and will have significant implications for the property sector.

In its response document, the Government confirms that it will reshape performance ratings in EPCs by extending the metrics that will be measured and reported on and when they will be required.

The Government intends to bring forward regulations in 2026 ahead of implementing new-style domestic EPCs from October 2026. A further response on outstanding matters is expected later in 2026.

2.  What are EPCs and Minimum Energy Efficiency Standards?

An EPC is a certificate that rates the energy performance of a building on a scale from A (most efficient) to G (least efficient). EPCs in privately owned buildings are required when they are built, sold or let. Under the Minimum Energy Efficiency Standards (“MEES”), landlords may not let any building with an EPC rating of F or G. There are proposals to amend MEES for both domestic and non-domestic privately rented buildings so as to raise the minimum standards. For domestic privately rented properties, the Government announced in January 2026 that the current minimum EPC standard of E is due to be raised to C by October 2030. For non-domestic privately rented properties, the position is still under review (see below).

In addition to making changes to the MEES, the Government is proposing to change the methodology for calculating and reporting on EPCs. It is this consultation that we look at in this article.

3.  Why Reform EPCs?

The reforms support the Government's commitment to reaching net-zero emissions by 2050, alleviating fuel poverty, and enhancing building standards across England and Wales. Stakeholders agreed that the existing headline metrics—the Energy Efficiency Rating (“EER”) for domestic buildings (a cost-based metric) and the Environmental Impact Rating (“EIR”) for non-domestic buildings (a carbon-based metric)—have been found to provide an incomplete picture of energy performance and to drive unintended outcomes.

4.  What will New EPCs Measure?

4.1  Domestic Buildings—Four New Metrics

The Government has confirmed that domestic EPCs will move from using a single metric to using four headline metrics (with other metrics provided as secondary information). This is intended to provide a more complete representation of a building's energy performance. The four metrics are:

• Energy cost: Retaining a cost element to reflect consumers' priority of understanding energy bills.
• Fabric performance: Assessing how well a building retains heat through the quality of its walls, roof, floors, and windows.
• Heating system: Evaluating the efficiency and carbon impact of a building's heating, rewarding upgrades to lower-carbon systems.
• Smart readiness: Measuring a building's capacity to integrate smart technologies that can optimise energy use and enable consumers to benefit from flexible tariffs.

In addition, a secondary energy-demand metric based on delivered energy and a secondary carbon-based metric will be included. The legacy EER will be retained initially to enable comparison with current EPCs and support ongoing regulatory compliance. We set out below in Section 5 how this will interact with a landlord's ability to let a property consistent with the MEES regulations.

4.2  Non-Domestic Buildings—Carbon Stays as the Headline Metric

For non-domestic EPCs, the Government will maintain the single carbon-based EIR as the headline metric, supporting businesses in the net zero transition, enabling emissions reporting, and facilitating ongoing compliance with non-domestic MEES regulation.

5.  When are EPCs required?

5.1 Validity Period Remains 10 Years

The Government sought views on whether the validity period for EPCs should be reduced from the current 10 years. The majority of stakeholders were in favour of retaining the existing 10-year validity period, due to the increased cost and administrative burden of commissioning more frequent EPCs. The Government has agreed with this.

5.2  Requirement to Have an EPC Brought Forward

In a notable shift, the Government intends to bring forward the requirement to have a valid EPC from the current 28 days after marketing to the point of marketing a property.

Stakeholders were also asked if an EPC should automatically be required to be renewed when it expires. This proposal was not followed through; it is sufficient that it is in place at the point of marketing for the next rent or sale.

5.3  Houses in Multiple Occupation

The Government has decided to remove the exemption to have a valid EPC for an entire House in Multiple Occupation (“HMO”) when a single room is let. However, a 24-month transitional period will be introduced to allow HMO landlords to comply.

5.4  Short-Term Rental Properties

Short-term lets will be required to hold a valid EPC when let, regardless of who is responsible for paying energy bills, ensuring consistency across all rental tenures. Currently, there are no specific requirements, although guidance outlines when EPCs are required.

5.5  Heritage Buildings

Another significant change is that the exemption from obtaining an EPC for officially protected or heritage buildings will be removed, meaning heritage properties will be required to have a valid EPC when marketed, let, or sold. However, under the MEES regulations, there is an exemption (which will be retained) where proposed improvements would unacceptably alter the building's special character or appearance, such as restricting alterations to feature windows, doors etc.

6.  Interaction with Private Rented Sector MEES Regulations

The MEES Regulations currently prohibit the letting of domestic buildings with an EPC rating of F or G. As a result of the changes set out above, there will now be four headline metrics. The Government's preferred approach is to require landlords first to meet a fabric performance standard and then a secondary standard against either the heating system or smart readiness metric. Landlords would be required to invest up to £15,000 per property (as opposed to the current £5,000), with higher standards applying to new tenancies from 2028 and all tenancies by 2030. Properties that already hold an EPC C rating under the existing system before the reforms take effect would be treated as compliant until their existing EPC expires.

7.  Next Steps?

The Government is working to deliver new-style EPCs from October 2026 and wants to work with industry to build a shared implementation plan. A further government response will address outstanding questions on DEC validity periods, EPC and DEC data, managing EPC quality, and air conditioning inspection reports.

Perhaps more significantly, as mentioned above, the Government is still formally required to respond to proposals to raise the MEES standard for non-domestic buildings in the private sector from E to B by 2030. While a formal response is outstanding, the working assumption is that the B MEES rating will be brought into force at a point later than 2030, but before 2035.

For anyone involved in the ownership, management, or financing of buildings in England and Wales, this partial response signals a fundamental shift in how building energy performance will be assessed and regulated. The move to multiple metrics, a broader scope of EPC requirements, and tighter private rented sector standards will demand careful planning and early engagement with the new regime.