The future of the UK’s commercial property sector is facing growing uncertainty, with industry leaders warning that millions of square metres of office, retail and industrial space risk becoming obsolete due to government inaction on energy efficiency rules.
New analysis from the British Property Federation (BPF) shows that 81% of commercial buildings across major English cities still fall below an EPC rating of B, despite slow signs of improvement.
The federation’s annual review of Energy Performance Certificate (EPC) data examined commercial buildings across all asset classes in London, Birmingham, Bristol, Leeds, Liverpool, Manchester and Newcastle. It found that just 3% of commercial buildings have achieved an EPC A rating, with a further 16% rated B.
Manchester continues to lead the way, with 22% of commercial buildings rated EPC A or B, followed closely by London at 21%. Across the seven cities analysed, the proportion of buildings achieving an EPC B rating has increased by only one or two percentage points over the past year.
While the BPF acknowledges that progress is being made, it warns the pace of improvement is far too slow and is being severely hampered by the government’s failure to clarify future Minimum Energy Efficiency Standards (MEES) for non-domestic property.
The industry has been waiting since 2021, when the government launched a consultation proposing that commercial buildings should reach EPC C by 2027 and EPC B by 2030. A response to that consultation was widely expected to accompany the recent Warm Homes Plan, which focused primarily on the residential sector.
Instead, the absence of any formal response has left commercial landlords and investors facing what the BPF describes as a regulatory vacuum.
According to the federation, the lack of clarity now means the proposed 2027 and 2030 targets are becoming “completely unrealistic”, as landlords are unable to plan refurbishment programmes, secure finance, or make informed investment decisions at scale.
The BPF is calling on ministers to publish a response to the consultation without further delay, warning that continued uncertainty risks undermining investment, slowing retrofit activity and accelerating the obsolescence of older commercial stock.
Rob Wall, assistant director at the British Property Federation, said: “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.”
Industry figures have repeatedly warned that without a clear regulatory roadmap, the UK risks falling behind its net zero ambitions while simultaneously weakening the long-term viability of its commercial property market.
