How landlords can become more sustainable
Climate change is an issue that every industry faces, and with sustainability becoming ever higher on the agenda, its a challenge that landlords need to embrace.
The residential property market accounts for 40% of the UK’s carbon emissions, and is increasingly subject to government regulations that will instigate a faster shift towards sustainability.
As of April 2025, changing Energy Performance Certificate (EPC) ratings will require almost three in five homes (58%) to improve their energy efficiency if they are to be let as a private rental. Many landlords will need to invest significantly in their properties to make the necessary renovations, or risk a fine of up to £30,000 for non-compliance.
However, it's not all bad news for landlords as research shows that renters are more likely to rent a sustainable property that has been renovated to be more environmentally friendly. In fact, according to a recent study, 42% of renters say they consider the environmental impact of a property before renting, and 82% of buyers say they would pay more for an energy efficient home.
Landlords therefore have the chance to do their bit in combating the effects of climate change and enhancing the marketability of their properties as well.
EPC ratings becoming more stringent
The new regulations will tackle the energy efficiency of homes in the private rental sector. On a scale of A to G, with A being the most efficient, rented homes will have to qualify for an EPC rating of C or above. Currently, the minimum rating is E. However over 12 million properties across the UK have a rating of D or lower, meaning many landlords will need to take action.
Insulation can reduce energy usage by 25%
Improving the insulation of walls can decrease energy usage to heat and cool a property by up to 25%, with this number growing when the property is fitted with more efficient windows. Landlords can expect to pay less in maintenance costs, as the property will be less susceptible to mould.
Increasing the insulation of a property also cuts energy costs, which in the current climate should make it easier to attract and retain tenants. Around 18% of renters say they would pay more rent if new windows were installed.
And when it comes to selling a property, it's estimated that there is a premium of up to £40,000 for homes with sustainable features sell for, depending on the area of the country you live in.
Efficient properties are more attractive for tenants
With the current cost-of-living crisis, upgrading from old, inefficient boilers to new condensing boilers can increase energy efficiency by an estimated 34% and can reduce a tenant’s fuel bill by around 30%. Of those surveyed, 15% of renters said that they would pay more rent if an efficient boiler and heating system was installed. It's also worth considering that as condensing boilers become the norm, spare parts and repairs for older boilers will likely become much more expensive, potentially driving up your costs.
Replacing old lightbulbs with new Energy Star LEDs will reduce electricity consumption by up to 75%, and they are promised to last up to 25 times longer than normal bulbs. Landlords can reduce maintenance costs and tenant's energy bills by replacing old lightbulbs and boilers, resulting in greater profitability for their property in the long run and, hopefully, happier tenants.
Government assistance for renovations
In the recent Spring Statement, Chancellor Rishi Sunak announced that VAT will be reduced on energy saving materials like solar panels, heat pumps and insulation to 0% for the next five years, making this area of renovation much cheaper, and potentially increasing landlord profit margins.
If you are considering making energy saving changes to your rental property give our lettings and property management team a call on 0161 511 5339 or complete our contact form.
