When is an EPC Not Required for a Commercial Property? l HollenPlus

Commercial Energy Performance Certificate Exemptions

In this insight, we address a question we are often asked….. “when is an EPC not required for a commercial property?

At HollenPlus we believe that while exemptions have their place, they are often a temporary fix for a long-term valuation problem. Here is everything you need to know about commercial EPC exemptions in the UK, and why your strategy should likely go beyond them.

When is a Building Truly Exempt?

Not every building requires an EPC.

The Energy Performance of Buildings (England and Wales) Regulations 2012 (the "EPC Regulations") establish which buildings are exempt from the requirement to hold a valid EPC, meaning they do not have to comply with Minimum Energy Efficiency Standards (MEES).

Buildings falling into the categories below are exempt:

• Places of Worship:

  Buildings used primarily for religious activities.

• Temporary Buildings:

  Those with a planned use of less than two years.

• Standalone Buildings under 50m²:

  Small, detached structures.

• Low Energy Demand:

  Industrial sites, workshops, or agricultural buildings that don’t use energy to "condition the indoor climate" (i.e., no heating or cooling).

• Listed Buildings:

  Only if the required energy improvements would "unacceptably alter" their character. (Note: This is not automatic and usually requires an assessment to prove).

The PRS Exemptions Register (The "F" or "G" Safety Net)

If your building does require an EPC but scores an F or G, you are legally prohibited from granting a new lease (or continuing an existing one) unless you register an exemption. These usually last for five years and include:

• The 7-Year Payback Rule:

  When the cost of the recommended improvements exceeds the value of the energy savings over seven years.

• All Improvements Made:

  You’ve done everything cost-effective, but the rating remains below an 'E'.

• Wall Insulation:

  When an expert confirms that insulation would damage the building’s fabric.

• Third-Party Consent:

  You’ve made "reasonable efforts" but cannot get permission from a tenant or planning authority.

• Devaluation:

  If a RICS surveyor confirms that the improvements would reduce the property’s market value by more than 5%.

The HollenPlus Perspective: Why Exemptions Can Be Costly

While an exemption might stop a fine today, it doesn't protect your asset’s value tomorrow.

At Hollen+, we’ve found that "un-lettable" F-rated buildings are often just a victim of poor data and default software values.

1. Exemptions Don't Solve "Stranded Asset" Risk

Institutional tenants and "Green Loans" don't care about exemptions; they care about performance. An exempt G-rated building is still a G-rated building on the open market, often leading to significant "brown discounts" during disposal.

2. Accuracy Over Capital Expenditure

In over 95% of our instructions, we improve the EPC rating without the need for physical works. By using Level 5 Dynamic Simulation Modelling (DSM) and hunting down "actual" building data rather than relying on default vales, we’ve frequently moved buildings from a D to a B with zero CAPEX.

3. The 2026 Shift

With new EPC frameworks and tighter carbon metrics likely to arrive in Q4 2026, the goalposts are moving. Relying on a five-year exemption now may leave you facing a much more expensive compliance bottleneck as 2030 approaches.

Future-Proof Your Portfolio

Exemptions should be a last resort, not a primary strategy. Our approach combines deep asset management expertise with advanced energy modelling to ensure your property remains liquid, compliant and returns are protected.

Before you register an exemption that might devalue your asset, let us look at the data. We can help you establish a true baseline and a commercially sensible pathway to compliance that protects your returns.

Contact the HollenPlus team today to discuss your portfolio strategy.