Seven out of 10 (72%) landlords want to see new rules raising the minimum Energy Performance Certificate (EPC) rating to A for both residential and commercial lettings – the highest level achievable, research from Handelsbanken reveals.
The shock findings come with tenants demanding a whole host of sustainable features in their properties from heat pumps to EV chargers.
SUSTAINABLE FEATURES
According to the bank’s latest annual Property Investor Report, based on insights from UK property investors with an average of 35 properties each, nearly all (92%) report tenants asking for sustainable features such as heat pumps, solar generation or EV chargers – with over a quarter (28%) requesting the latter.
Three in five tenants (58%) have requested properties have an Energy Performance Certificate (EPC) rating of C, with this rising to nine out of 10 (88%) tenants in London amid high energy costs.
Current government regulations in England require all residential and commercial rental properties to have an EPC rating of E or above before being let to tenants, with previous plans to raise the minimum EPC rating to C for existing residential rentals by 2028 scrapped in September of last year.
While a quarter of respondents have cut the amount they planned to invest following this announcement, just under half (44%) are continuing with their original investment plans.
ENERGY EFFICIENCY
Richard Winder, UK Head of Sustainability at Handelsbanken, says: “Property investors are clearly recognising the long-term value of maximising energy efficiency across their portfolios and are eager to meet the highest sustainability standards to capitalise on the commercial benefits.”
He adds: “Locking in value, reducing operating costs, and attracting and retaining tenants are all front of mind for investors – research suggests that assets with the highest EPC ratings enjoy considerably longer lease lengths.”