The proposed 2027 EPC C deadline may no longer be going ahead, but Welsh landlords, tenants, investors and lenders still face a more demanding energy performance landscape.
Why the EPC debate still matters in Wales
Welsh commercial property is entering a more complicated phase of energy performance regulation. In 2026, April 2027 should no longer be treated as a fixed EPC C deadline for every commercial letting.
In June 2026, the UK Government confirmed that the previously proposed interim EPC C milestone for non-domestic private rented property would not be taken forward. The current minimum standard remains EPC E, while the Government intends to introduce a higher EPC B standard from 2031 for larger rented non-domestic buildings over 1,000 square metres, where cost-effective and subject to secondary legislation.
That does not make the issue disappear. It changes the timetable and puts a sharper focus on practical planning for older offices, light industrial premises and independent retail units across Wales.
The policy shift behind portfolio decisions
Since April 2018, non-domestic landlords in England and Wales have generally needed an EPC rating of at least E before granting a new tenancy, renewal or extension, unless a valid exemption applies. Since April 2023, that requirement has applied to all privately rented non-domestic properties, including existing lettings.
Energy performance is becoming a more material factor in transactions, lease negotiations, funding decisions and long-term asset management.
For Welsh landlords, tenants, investors and lenders, legal clarity is becoming more important. Berry Smith LLP is a Cardiff-based UK law firm regulated by the Solicitors Regulation Authority, with a team of commercial property solicitors in Cardiff advising on commercial development, commercial leases, secured lending, sale and purchase, and property management across Wales.
According to Chris Jones, Partner at Berry Smith LLP, the Welsh commercial property conversation in 2026 has shifted meaningfully as the practical reality of the changing MEES timetable has become clearer, both to landlords holding portfolios that require considered decisions and to tenants negotiating leases that may run into the next phase of energy performance regulation.
Where landlords should start
For landlords, the sensible starting point is not a rushed programme of works. It is a clear portfolio audit.
That means identifying current EPC ratings, checking certificate dates, reviewing lease terms and understanding which assets may face future regulatory, funding or market pressure. An EPC is generally valid for ten years, but older assessments may no longer provide the strongest basis for decision-making.
The next question is feasibility. Some properties may be capable of straightforward improvements. Others may involve listed building issues, planning constraints, tenant disruption, service charge questions or costs that need careful commercial assessment.
Where a landlord intends to rely on an exemption, the evidential basis and registration position need proper attention.
The view from Berry Smith
Chris Jones, Partner at Berry Smith LLP, said the conversation around commercial property energy performance has become more practical over the past twelve to eighteen months.
“Welsh commercial property owners are increasingly moving from general awareness of MEES to active decision-making across portfolios, lease events and transactions,” he said. “The removal of the proposed 2027 EPC C milestone does not mean the issue has gone away. We are seeing energy performance considered in new lettings, lease renewals, acquisitions, disposals and secured lending. Early legal advice can help parties understand their contractual position and avoid leaving key decisions until a transaction or lease event is already under pressure.”
What tenants, investors and lenders need to watch
Welsh commercial tenants
Tenants should not assume that EPC compliance is only a landlord issue. The primary MEES obligation may sit with the landlord, but lease terms can affect how works are carried out, who pays, access and disruption.
Businesses signing new leases in 2026 should consider the EPC position at the outset. If premises are likely to need improvement during the term, the lease should be clear on access, service charge recovery, alterations, reinstatement and operational disruption.
Welsh commercial investors
For investors, energy performance is now part of asset quality. Buying older commercial stock may still make sense, but due diligence needs to consider achievable EPC improvement, likely works costs, tenant profile, lease events and exit value.
Disposals may also be affected. A property with unclear improvement potential may attract a narrower buyer pool than a similar property with a documented plan, recent assessment and a clearer compliance route.
Welsh commercial lenders
Across the UK commercial lending market, energy performance increasingly forms part of credit assessment, with some lenders offering green lending products or asking for evidence of improvement plans.
For below-standard or older Welsh stock, refinancing may therefore require earlier preparation than owners have traditionally allowed.
Regeneration is widening the gap
Wales’ commercial property market is not moving at one speed. Alongside older stock, regeneration and new development are changing expectations.
Cardiff Central Station’s planned enhancement programme sits within a wider city centre commercial context. Swansea’s Copr Bay programme has already delivered major regeneration activity, while Porthcawl’s waterfront regeneration remains part of Bridgend county borough’s longer-term planning picture. Newport regeneration and development across the M4 corridor adds to the same wider pattern.
The practical effect is a widening gap between modern, efficient commercial space and older offices, retail units and light industrial stock across Cardiff, Newport, Swansea, Bridgend and the wider M4 corridor that may need investment to remain competitive. For occupiers, investors and lenders, EPC ratings are becoming part of the broader question of location, running costs and long-term value.
The decisions that should not be deferred
The strongest position in 2026 is likely to belong to those who use the current window well.
Immediate steps should include portfolio audits, EPC reviews, lease checks and identification of assets where energy performance could affect funding, renewal, disposal or occupation. For larger rented non-domestic buildings, owners should monitor the proposed 2031 EPC B framework as it moves towards secondary legislation.
Where works appear viable, landlords will need to coordinate timing with tenants, contractors, surveyors, lenders and professional advisers. Where works appear less viable, disposal, alternative use or exemption evidence may need to be considered before a transaction creates pressure.
Why early decisions will shape the Welsh market
The Welsh commercial property market is not facing the April 2027 EPC C deadline in the form previously expected. Legal and commercial advice should reflect the current government position, not yesterday’s consultation timetable.
Even so, the direction of travel remains clear. Energy performance is becoming a more important factor in commercial property value, lease negotiation, lending appetite and occupier decision-making. The proposed 2031 EPC B requirement for larger buildings will sharpen that further if enacted.
For Welsh commercial property owners considering their portfolio position in 2026, the strongest position is likely to belong to those who understand their stock, review their leases, consider improvement options, document any exemption position and coordinate with lenders and tenants before pressure builds.
The Welsh commercial property market of 2031 will look materially different from the market of today. Those who use the intervening period effectively will be operating from a stronger position than those who defer practical decisions.
This article is for general information only and does not constitute legal, financial or property advice. Minimum Energy Efficiency Standards (MEES) regulations, Energy Performance Certificate (EPC) requirements, and related commercial property law are subject to legislation and may change. Anyone considering commercial property matters, including MEES compliance, portfolio decisions, lease planning or retrofit programming, should take advice from a qualified solicitor appropriate to their circumstances. Berry Smith LLP is a limited liability partnership registered in England and Wales (registration number OC326121), authorised and regulated by the Solicitors Regulation Authority.
