Property Agency

Immediately before parliament broke up for the last time before the General elections, the Minimum Energy Efficiency Standards (MEES) were passed, somewhat quietly, into law.

MEES slipped through under the shadow of the General Election


MEES will be implemented on new leases including lease renewals and lease extensions as of the 1st of April 2018 and is anticipated by some to have a significant impact on the UK’s current building stock. Whilst the impacts are debateable and subject to a number of variables is there any reason for real alarm?

To make a long story short, the bill will ultimately mean that any landlord letting a commercial property, or residential for that matter, must ensure that their property is deemed ‘efficient’ by environmental standards otherwise they will be breaking the law and may face fines and penalties for non-compliance. The bill excludes properties that are being sold and any properties currently exempt from EPC legislation are also excluded, but premises being let including sub-lets and multi-lets will all be impacted. Whilst a large majority of modern commercial property construction is steering towards the upper classifications of the EPC rating, older properties may potentially start to feel the sting. Especially if energy efficiency starts to have a serious impact on market values.

The clarity and exact consequences that the MEES will have on the commercial property market are somewhat unclear and clouded as is the case with most new legislation. The potential outcome of the general election will no doubt have a bearing on how the policy affects the industry but either way it would appear as though energy efficiency is starting to apply significant legal pressure onto landlords letting inefficent properties. In the longer run, in order to achieve the UK emissions targets by 2050, the property market will have to make significant steps towards improving overall emissions outputs and with the MEES making it unlawful for letting properties in bands F and G on the EPC scae, it’s a start, but in the grand scheme of things, we still have a long way to go.

It is important to note that some exemption criterions are going to be available, for example, in the instances of when works to improve efficiency would have a negative impact on the rental value/capital of the property or if the lease is shorter than 6 months or 99 days. These exemptions are however outlined to be non-transferable and will ultimately expire within 5 years.

How the MEES will affect the commercial property market depends on a number of variables but undoubtedly one of the most significant will be which party is in control after Thursday’s elections. Wil MEES open the opportunity for a craze of investors to purchase cheap ‘inefficient’ buildings? Will MEES encourage people to invest in improving and sustaining energy efficiency in the UK’s commercial property?

Regardless of the outcomes, it would appear that this is ultimately the first of many more stringent policies tasked with improving efficiency in the UK commercial property stock by the 2050 deadline.

At the moment, only time will tell how this will affect building owners and ultimately, these consequences are hanging in the balance until Thursday the 7th!