Landlords increase spending on green property upgrades

Nearly nine in 10 property investors are increasing spending on sustainable property features as energy costs, extreme weather and tougher standards shape investment decisions.

Handelsbanken’s fifth annual Property Investor Report found that 89% of investors are allocating more money to sustainability measures across their portfolios.

The research surveyed 200 property investors, property management professionals and landlords across the UK.

Energy efficiency measures are attracting much of the additional spending, with landlords using planned improvements to protect property values, manage future costs and meet changing tenant expectations.

Tenants want efficient buildings

Handelsbanken’s head of sustainability, Richard Winder, said: “Climate change had already become a mainstream commercial consideration for property investors.

“But further energy price shocks, weather extremes and the tumbling cost of clean technologies have only made the case more compelling and urgent.

“Regulations will continue to tighten towards net zero, but it’s market demand that’s accelerating action today.”

He added: “Tenants are placing greater value on buildings that are efficient, comfortable and resilient.

“For many landlords, sustainability investment is no longer just about meeting standards.

“It is about ensuring properties remain competitive, attractive and fit for the future.”

Renters ask for EPC C

The bank says that properties rated EPC C or above are now the sustainability feature most frequently requested by tenants, according to 66% of those surveyed.

Other requested features include electric vehicle charging points, cited by 50% of respondents, smart meters or smart home technology at 47%, and solar panels at 43%.

Meanwhile, 68% of landlords believe tenants are prepared to pay more for greener buildings.

That figure has fallen from 92% in the previous report.

Tenants prepared to pay more

The regional figures show 79% of investors with properties in Wales believe tenants are prepared to pay more for greener homes.

The proportion was 78% among investors with Scottish properties, 76% in the West Midlands and 75% in London.

Demand for higher EPC ratings was reported most frequently by investors with properties in the North East of England, at 80%.

That was followed by the South West of England at 79% and London at 77%.