Boodle Hatfield Property Insights, Summer 2026 - Flipbook - Page 3
Boodle Hat昀椀eld
Property Insights
Tighter minimum energy
e昀케ciency standards (MEES)
Energy performance remains 昀椀rmly on the policy agenda
with the recent publication of the Government interim
response to the 2019 and 2021 consultations on MEES
for commercial premises.
The response sets out how the Government “intends
to implement a targeted approach to strengthening the
policy, focused on supporting businesses that rent larger
premises by helping to cut energy costs and improve
energy ef昀椀ciency”. The headlines of which are that:
•
From 2031 an EPC of Band B or above will be required
for commercial rented buildings over 1,000 square
metres.
•
Buildings below 1,000 square metres will continue to
be subject to the current minimum standard of EPC
Band E.
•
The previously proposed interim EPC Band C
milestone for 2027 will no longer be taken forward.
•
Existing provisions, including the seven-year payback
test, and current statutory exemptions will remain in
place with the stated intention of ensuring that only
improvements that are “practical, affordable and
cost-effective” will be required.
Full details of the proposed measures will be set out
in a further Government response to be published at
the “earliest opportunity” and will require secondary
legislation. The proposed introduction of the Band B
requirement will undoubtedly focus attention on the need
to review the energy performance of existing let properties
and future acquisitions. In many cases landlords will
not have the ability to carry out the necessary energy
ef昀椀ciency improvement works within the constraints of
existing leases, meaning that, in practice landlords, will
need to rely on the consent exemption and / or wait for
the lease expiry before carrying out improvement works.
The proposed changes set out above only relate to nondomestic (commercial) let properties. A separate regime
applies to domestic (residential) let properties; with
domestic let properties set to require an EPC of Band C
or higher from October 2030, alongside changes to the
methodology used to prepare an EPC for a domestic
property.
Sophie Henwood, Commercial Real Estate Partner
Residential reforms
Renters’ Rights Act
Although primarily focused on the residential sector,
recent residential reforms are increasingly relevant to
commercial landlords including those with mixed-use
portfolios.
The Renters’ Rights Act 2025 is the most signi昀椀cant
change for the residential sector for some considerable
time. Largely in force from 1 May 2026, the Act replaces
assured shorthold tenancies with a single system of
assured periodic tenancies.
Among the headline changes are the abolition of both
昀椀xed term tenancies and section 21 “no fault” evictions,
the move to periodic tenancies that can be ended by the
tenant on two months’ notice and a shift to an annual
statutory process for rent increases. Restrictions on
demands for rent in advance and strengthened tenant
rights (including in relation to pets) as well as measures
to increase transparency and anti-discrimination in the
letting process have also been introduced.
Importantly, the changes introduced by the Act have a
retrospective effect and (with very limited exceptions)
apply to existing tenancies as well as new ones.
The Act also lays the groundwork for the introduction of a
Private Rented Sector database, a Landlord Ombudsman,
and expanded housing standards, including the Decent
Homes Standard and Awaab’s Law.
While not yet fully in force, the direction is towards a more
regulated and compliance-heavy regime, with greater
emphasis on transparency and record-keeping, both of
which come with associated costs.
For more information see:
•
Renters’ Rights Act: Key points for Landlords
