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What Landlords Must Know About the June 2022 SBEM Update
If your commercial Energy Performance Certificate (EPC) was issued before June, 2022, it may no longer reflect your building’s true energy efficiency—or meet upcoming Minimum Energy Efficiency Standards (MEES).
Changes to the commercial EPC calculation methodology in June 2022 have made assessments significantly more rigorous, with many properties now receiving lower ratings than they did under the old system, especially buildings burning fossil fuels (gas and oil) for heating. The very good news for landlords with buildings that use electricity for winter heating is that their EPC grades can often improve by simply reassessing the existing EPC using the governments latest software.
For commercial landlords and property investors with gas/oil burning buildings this could mean unexpected compliance risks, leasing restrictions, and reduced asset value.
What Changed in June 2022 – the EPC software update explained
In June 2022, the UK Government introduced a major update to the SBEM (Simplified Building Energy Model) – the software used to generate commercial EPCs.
Key changes included :
• Updated Part L Building Regulations (focusing on energy performance)
• Revised carbon factors to reflect the decarbonisation of the UK electricity grid. A result of Britain’s substantial offshore wind industry, a national success story.
• More accurate modelling of building services, insulation, and lighting
• Tougher standards aligned with net zero carbon goals
The result
EPCs issued under the new SBEM 2022 methodology are generally less favourable, especially for older or inefficient buildings using fossil fuels for heating. However, all electric heated commercial buildings are already seeing more favourable grades just by updating the draft EPC in today’s software. Vital has reassessed buildings on Oxford Science Park that were previously EPC Grade E but by simply reassessing in the current software, the building jumped to a Grade B – the asset management client was delighted with our work.
Why Pre-June 2022 Commercial EPCs May Be Misleading
If your commercial EPC was issued before June 2022, the rating may no longer be valid for decision-making. Here’s why:
- It May Not Reflect Current MEES Requirements
• EPCs are central to MEES compliance.
• MEES for commercial property is expected to increase from Grade E to Grade B by 2030
• An EPC issued before the update might show Grade D or E, but under today’s standards, the building could fall to F or G.
Letting a non-compliant property is illegal and could trigger penalties of up to £150,000. - You May Face Leasing or Sale Issues
• Tenants, buyers, and lenders are increasingly EPC-aware.
• Older EPCs may be rejected during lease negotiations, refinancing, or due diligence. - Portfolio Risk Is High for Large Landlords
• Portfolios with dozens of EPCs issued before 2022 may contain hidden risks.
• This could affect capital planning, ESG compliance, and asset performance tracking.
What Should Landlords and Asset Managers Do?
- Audit Your EPCs
• Check all EPC issue dates and heating sources
• Flag any certificates issued before June, 2022 for review. - Reassess Key Properties
• Commission updated EPC assessments using the latest SBEM software. Vital always carries out draft EPC assessments which are private and confidential for our clients.
• Focus on really understanding how your building is heated in the winter – is it already an all-electric building?
• Gas and oil are now deemed “high CO2 pollution fuels” and will impact the EPC Grade.
• Buildings assessed before June 2022 that are using electricity as the heating source could improve just by being re-assessed using the updated SBEM software. - Plan for minimum EPC Grade B Compliance. With MEES tightening in the next 5 years, invest in:
• Fabric-first upgrades (insulation, glazing)
• HVAC system improvements, eg changing gas boilers to electric boilers and electric air con splits
• LED lighting and occupancy sensors
• Smart controls and metering
• Heat pump integration - Update Stakeholders
• Inform asset managers, tenants, and finance teams about EPC status.
• EPCs will play a larger role in ESG strategies and valuation.
Summary: Commercial EPCs Before June 2022 – Act Now to Avoid Risk
| EPC Issued | Risk Level | Recommended Action |
| Before June 15, 2022 | High | Reassess under SBEM 2022 |
| After June 2022 | Lower | Review for MEES minimum Grade B planning |
Don’t wait until the 2030 MEES deadline hits – reassessing EPCs now helps you stay compliant, reduce tenant churn, and protect asset value.
At Vital we specialise in helping clients to ensure their buildings are EPC and MEES compliant – call us today on 0345 111 7700 and let us help you assess your commercial rental portfolio.