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The ever-increasing importance of energy performance

Planned changes to the Minimum Energy Efficiency Standards (MEES) may provide greater breathing space for some smaller properties – but they also raise an interesting investment question: could market expectations ultimately move faster than regulation?

In June 2026, the Government confirmed its intention to change the approach previously proposed for privately rented non-domestic property in England and Wales.

Earlier proposals included an interim requirement for properties to reach an EPC C rating by 2027 as part of the journey towards EPC B. The Government now says that the 2027 milestone will not be taken forward. Instead, it proposes that – from 2031 – privately rented buildings over 1,000 sq m (10,764 sq ft) should achieve EPC B, where cost-effective.

Properties below 1,000 sq m would continue to be subject to the current minimum EPC E standard, with no set deadline currently proposed for improving beyond this level.

Existing flexibility mechanisms are also intended to remain. The seven-year payback test will continue to apply – meaning that landlords are obliged to carry out works costing only the same or less than the expected energy bill savings over seven years.

What could this mean for Craigard syndicates?

The introduction of a 1,000 sq m threshold is relevant because a number of properties within Craigard syndicates fall below that size. If the proposals are implemented in their current form, those smaller properties would therefore sit outside the new MEES requirement.

Indeed, the more interesting long-term question may be how the market treats properties that fall outside the regulations but do not achieve the same energy standards.

Before committing to a lease, occupiers are increasingly expecting landlords to improve energy performance – irrespective of whether regulations require it. Investors are looking for discounts on buildings with poorer energy credentials because of the potential cost of future improvements. Some purchasers are ultimately choosing not to consider such properties at all.

Craigard has already seen the benefits of focusing on operational energy performance. Crown House 2 in Southampton achieved a four-star NABERS rating, independently recognising its strong measured energy performance.

Two more properties have also achieved excellent energy efficiency ratings: Great Park Court, a Bristol multi-let office investment, gained 4.5 stars (NABERS), while our Cotton Lake House offices in Dartford had EPC A-6 and BREEAM Very Good ratings.

Our approach is therefore not simply to ask whether a property falls within a particular regulatory threshold. We continue to consider where appropriate improvements can enhance the quality, appeal and long-term resilience of the buildings held by our syndicates.

Craigard will continue to monitor the regulatory changes and consider their potential implications for syndicate properties and investors. MEES and energy compliance are specialist areas, and appropriate professional advice will be sought where required.

For further information on commercial property syndicate opportunities, please view our current projects and contact us.