MEES and valuation: what the RICS standard asks of valuers

What does the RICS standard say about MEES?

The standard has a section on England and Wales headed "MEES and EPCs". It says that "the introduction of MEES regulations presents cases where a value implication is most likely", and that:

• "When valuing properties, valuers should assess the level of risk posed by MEES and consider the extent to which, for example, the market rent, yield/discount rate and possible rental growth will be affected."
• "Even if there is no clear evidence of market value change, suitable commentary on valuation risk (subject to the purpose and basis of valuation) may be appropriate."
• Properties of poor specification and low energy efficiency, "even if currently compliant, may reduce in value over a time horizon that would be in the minds of purchasers/investors at the valuation date".
• Valuers may need to agree with the client to work with energy experts, building surveyors and cost consultants on the works and their costs, "in order to reflect the impact of current and pending MEES requirements accurately in their valuations".

It also says EPCs "may be obtained via government open-source data included in the relevant EPC registers", and that subject to the purpose and basis of the valuation, the valuer "should consider the latest energy performance profile of the property and risks related to the EPC that impact value".

Is it mandatory for valuers?

The standard took effect on 30 April 2026. RICS uses "must" for a mandatory requirement, where not complying is a breach, and "should" for expected practice, where an alternative that achieves the same or a better outcome can be acceptable. The MEES passages use "should". The standard also points to the mandatory ESG requirements in Red Book Global Standards for terms of engagement (VPS 1), inspection and investigation (VPS 4) and reporting (VPS 6), and quotes the International Valuation Standards, which the Red Book incorporates: "The impact of significant ESG factors should be considered in determining the value of an ... asset".

What should a valuation report show about EPCs?

The standard gives an example table for presenting a valuer's EPC findings. In summary, it covers:

• the property, unit and postcode, and property type;
• the EPC rating, its numerical score (the asset rating) and the EPC's expiry date;
• estimated emissions and primary energy figures, where available;
• the floor area in m²;
• material risks identified in the EPC's recommendation report, and what the owner, occupier or others are doing about them;
• if exempt, the reason and confirmation that the exemption is registered, or whether the property is outside MEES altogether.

It then suggests a red, amber and green basis for EPC valuation risk. Broadly: green for A or B, or a property outside MEES; amber for C to E; red for F or G. Exempt properties, those with no EPC yet and those whose likely rating is unknown are placed by how much spending is likely when the exemption ends or an EPC is next needed. It notes that registered exemptions last only 5 years, so "a current exemption is not risk-free".

Where can a valuer get the EPC facts?

From the register. The rating, asset rating, floor area, lodgement date and recommendations for every non-domestic EPC in England and Wales are public. Sortd Industrial's checker shows them for any industrial or warehouse building, with the estimated expiry and where it stands under MEES, and the paid plans add building reports and portfolio upload for a whole book of properties.

The standard expects the sources a valuer relies on to be agreed in the terms of engagement, and any reliance on data to be stated in the report. The register shows each EPC as lodged: a building may have been improved since, and the expiry date of a non-domestic EPC is 10 years from lodgement. See how to check an industrial EPC.

How does the 2031 proposal fit into a valuation?

The standard refers to "current and pending MEES requirements". The pending one is the government's proposal, in its interim response of 18 June 2026, that privately rented buildings over 1,000 m² (10,764 sq ft) reach EPC B from 2031, where cost effective. It isn't law yet: it needs secondary legislation, and the 7-year payback test and exemptions remain. A valuer reflecting it is reflecting a proposal, and what's still open is in EPC B by 2031.

How much industrial floorspace is below B?

Across England and Wales, 25,619 industrial and warehouse buildings over 1,000 m² (10,764 sq ft) have a latest EPC rated C, D or E: 94.02 million m² (1.01 billion sq ft) of floorspace that meets today's E minimum but falls short of the EPC B standard proposed for 2031. Another 1,037, with 3.57 million m² (38.4 million sq ft), are rated F or G, below today's minimum. 11,492 are rated B or better. (EPC register, snapshot 30 Sep 2026; general industrial and storage or distribution uses.)

Of the 25,619 buildings over 1,000 m² rated C to E, 6,062 (23.7%) had an EPC that had already lapsed at the snapshot and 7,525 more were estimated to lapse before 2031: 13,587 in all (53.0%). We estimate expiry as the lodgement date plus 10 years, because the register's data has no expiry date (snapshot 30 Sep 2026).

What does the evidence say about EPC ratings and value?

It's mixed, which is partly why the standard asks for commentary on risk even without clear evidence of a value change:

• Savills, looking at 673 new or direct leasehold deals signed since 2020 on logistics units over 100,000 sq ft (9,290 m²), found that buildings rated A+ or A achieved a rent premium over those rated C or lower: 55% nationally at an aggregate level, with location still crucial (Savills).
• An earlier academic study of 708 UK commercial assets found no evidence of a significant relationship between energy performance and rental or capital values (Fuerst and McAllister, 2011).
• Knight Frank says the cost of retrofitting is "now routinely priced into underwriting" (Knight Frank).
• Some lenders price ratings directly. Barclays offers a 0.3% interest rate discount on commercial mortgages for properties rated B or above (Barclays).

The devaluation exemption

Valuers have a direct role in one MEES exemption. If installing the relevant improvements would reduce the market value of the property, or the building it's part of, by more than 5%, the landlord can register a 5-year exemption. The evidence must be a report from an independent surveyor on the RICS register of valuers. See MEES exemptions.