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Demand grows for greener properties to lower energy bills

tenants look for properties

Most portfolio landlords have been asked to make energy efficient improvements by their tenants in the past year, a Handelsbanken survey has revealed.

According to the bank’s poll of investors who each own an average of 35 properties, 92% said tenants had asked for sustainable features such as heat pumps, solar generation or EV chargers – with 28% requesting the latter. Three in five tenants (58%) want properties to have an EPC rating of C, rising to 88% of tenants in London amid high energy costs.

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. However, under a potential Labour government, private rented homes would need to meet minimum energy efficiency standards by 2030 – although the party hasn't yet specified which EPC band.


Handelsbanken’s findings also show that landlords have no problem with these plans as a staggering 72% of respondents would welcome potential new rules raising the minimum EPC rating to A for commercial and residential lettings – the highest level achievable.

While a quarter of those polled have reduced the amount they planned to invest following Rishi Sunak’s announcement last year that energy efficiency targets were being dropped, a substantial proportion of landlords (44%) are continuing with their original investment plans, it reports.


The bank has also seen an increased appetite from investors for either developing or acquiring properties with better EPC ratings based on the green financing initiatives offered by banks discounting loan margins.

Richard Winder, Handelsbanken’s UK head of sustainability, says: “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.”


Energy efficiency 2
Heat pumps