Buy to Let Watch – Budget complete, MEES about to launch: EPC countdown has begun – Mortgage strategy
Let’s not talk about the budget for now. Mainly because I wrote this post beforehand and then you read it! But there are other “things” that landlords may not think about as much because, frankly, there’s only so much bandwidth.
Instead, I want to focus on MEES (Minimum Energy Efficiency Standards) and the changes that are coming. This next phase is very important and may impact the ability of landlord clients to refinance or even the ability of properties to rent out.
What’s changed?
In summary, the proposals stipulate that all new residential tenancies must have an Energy Performance Certificate (EPC) rating of C or above by 1 April 2028. This would allow all properties currently in the lowest E rating to be upgraded to the new higher standard in just three years.
There may be exemptions, but don’t count on them
To help, the changes will be phased in through a new “compliance window.” During these windows, landlords must work towards achieving target ratings or register for a valid exemption.
For example, while the work deadline for all properties to obtain an EPC rating of C or above is April 1, 2028, the compliance window could be 2028-30. Of course, by 2030, the new MEES standard will be extended to all rentals.
This is still a proposal and not fully legislated yet (sound familiar?), which means many landlords are on the fence. Nonetheless, we brokers need to start these conversations now.
Brokers should prompt clients to retain written evidence of improvements, quotes and appraisal reports
There may be exemptions, but don’t count on them. As final guidance from the government is still awaited, if we are working on the basis that the exemptions will be broadly consistent with current MEES rules, we can expect the following to be in force:
Seven-year investment return: If all cost-effective improvements (improvements that pay for themselves within seven years) have been made but the EPC still falls short;
Consent question: Refusal of construction permission by the tenant, superior landlord or planning authority;
Depreciation: If a qualified surveyor confirms that the improvements will reduce the market value of the property by 5% or more; and
Temporary exemption: For example, a change in ownership or a short-term change.
These exemptions require registration and documentary evidence, such as an offer or survey report, so landlords need to plan ahead.
Start the conversation now to give your customers time to plan, escalate and turn them into opportunities
Failure to comply means more than just fines; It may also render the property unrentable and, more worryingly, “unmortgageable”. Lenders already incorporate EPC ratings into risk assessments, and adverse ratings can impact valuations, refinancing options and portfolio strategies.
Helping our clients prepare and plan to ensure properties meet the new standards in a timely manner is critical. Here’s my suggestion:
raise awareness
Many landlords remain focused on short-term costs and benefits. However, MEES deadlines can result in significant expenditures. Improving a property’s energy rating can cost hundreds or even thousands of pounds.
If landlords delay, they risk incurring additional costs within a short period of time, leaving the property vacant and unrentable, and having difficulty refinancing.
Built-in risk assessment
When reviewing a client’s business plan or financing needs, be sure to include energy rating risks. Properties rated D or below are on loan time.
Encourage early action
It would be beneficial for clients to commission or update an EPC now and review recommended improvements in a timely manner ahead of the next major compliance window (2025-27). Early upgrades may increase property attractiveness, facilitate borrowing and reduce regulatory risk.
The changes will be phased in through a new “compliance window”
Advise on exemptions
If the cost of the improvements is prohibitive or consent cannot be obtained, customers should seek professional advice as to whether an exemption applies and ensure timely registration. Brokers should prompt clients to retain written evidence of improvements, quotations and appraisal reports, and other relevant documentation.
The bigger picture
April 2028 may feel far away, but from a real estate perspective, it’s right around the corner. Starting the conversation now gives your client time to plan, upgrade and turn it into an opportunity, ultimately increasing property value, attracting tenants and getting a better price.
Jeni Browne is Director of Commercial Mortgage Sales
This article appears in the December 2025/January 2026 edition Mortgage strategy.
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