Commercial property energy upgrades slow despite tighter standards

30 April 2026

The pace of energy efficiency improvements in the UK commercial property sector has slowed, according to new analysis that warns thousands of buildings remain in categories that cannot legally be let without exemptions.

Research by Search Acumen found growth in the number of commercial buildings receiving higher Energy Performance Certificate (EPC) ratings eased in 2025 after several years of rapid expansion.

Buildings rated A, A+ and B had previously increased by an average of 26% a year until 2024. In 2025, growth slowed to 20%, with fewer top-rated EPC registrations recorded than in either of the previous two years. Registrations fell 22% compared with a peak reached in 2023.

The analysis also highlighted the number of properties still falling below the minimum legal standard under the government’s Minimum Energy Efficiency Standards (MEES). Buildings with EPC ratings of F or G are generally considered unlettable unless landlords secure an exemption.

The office sector accounted for the largest share of these lower-rated properties. More than 3,500 office buildings were recorded in EPC bands F and G over the past five years, according to the report.

In 2025 alone, offices made up 48% of all new F and G EPC registrations. The report said rising oil and wholesale gas prices were increasing operating costs most sharply for inefficient buildings, raising concerns over vacant properties and long-term obsolescence.

During the first two months of this year, 200 non-domestic buildings were registered with EPC ratings of F or G. Across the whole of 2025, the total reached 1,246, down only 2% on the previous year.

The findings suggest progress towards compliance has slowed since rules requiring all leased commercial properties to achieve at least an EPC rating of E came fully into force in 2023.

Data in the report showed the proportion of newly registered non-domestic EPCs rated A, A+ or B rose from 11% in 2016 to 43% in 2025. However, the overall number of high-rated registrations has declined since the 2023 peak, despite tighter energy standards.

Andrew Lloyd, MD at Search Acumen, says:

“A, A+ and B ratings rose significantly from 2020 to 2024, peaking at 61% of all EPCs lodged in 2023. But the rate of decarbonisation of commercial assets has stalled slightly in 2025, which is disappointing to see. Whilst some of the decline could be attributed to delays in registration, it’s likely that, for many, this reflects a cooler financial climate overall, slowing down the race to retrofit.

“Headwinds from new tax policies and geopolitical uncertainty in recent times are making their mark. Without doubt, the goal of achieving an EPC rating of B or higher in all commercial buildings under MEES by 2030 feels worlds away from our current reality, heightening the risk of stranded assets and transactional complexity”

“If we look at offices, upgrade costs are huge, often £100 – £200+ per sq ft, which often doesn’t stack up financially like it once did. Lenders also tend to penalise more inefficient buildings, so you have a group of buildings fracturing off into unusable states. Whilst some of these office buildings may be vacant, those in use, perhaps under legacy agreements, will be highly vulnerable to rising energy bills. The impact of the Middle East on oil prices and energy markets will be felt for several months, if not years, as supply chains recover long-term.”