Property investors must prioritise energy efficiency in rental homes


Getting a cheap price for a rental property no longer means making the best returns. Honing in on what tenants are looking for could bag you the best investment for long-term success.

The private rented sector continues to adapt to the changing world, and the environment is high on everyone’s agenda. For tenants, a home with top energy efficiency will not only keep bills down, but will also reduce the property’s carbon footprint, which is a big concern for many right now.

New research from Direct Line for Business shows just how crucial this factor actually is. In a survey, around 25% of renting Brits said they would leave (or not even consider) a home with poor energy efficiency. A huge 80% would ask how landlords have improved the sustainability of a property. Meanwhile, three quarters of people say energy efficiency is important when looking at a rental home.

Making existing homes greener

Luckily, a large number of landlords are on board with the importance of the issue. Direct Line found that 83% had made changes to make their properties more energy efficient. A further 73% recognised how important the issue is for tenants. Cost-wise, 38% of landlords said they had spent more than £1,000 over the past year increasing the energy efficiency of their homes.

Jamie Chaplin, landlord business manager at Direct Line business insurance, said: “It’s encouraging that both tenants and landlords see a property’s energy efficiency as important, ensuring that rented homes are more sustainable and cheaper to run.

“It’s also great to see so many landlords taking action, making a diverse range of changes to their properties to ensure they’re greener.”

He added: “Landlords making changes to their property should check their existing insurance arrangements and ensure that they have the right cover in place.”

Invest in an energy-efficient home

For property investors and landlords looking for their next purchase, it’s clear energy efficiency should be a priority. If tenants will dismiss a home based purely on this element, focusing on it will massively improve its rentability.

One option would be to purchase a new-build. Around 75% of newly built homes score ‘A’ or ‘B’ in their EPC ratings according to government figures. They are typically built with higher quality insulation, modern draught-proofing and include brand new appliances that are cheaper and greener to run.

Similarly, newly converted properties can also score higher when it comes to EPC ratings. This can be another great option for landlords and property investors, compared to buying a home where the landlord will need to invest extra to get energy efficiency standards up to scratch.

What’s the minimum EPC rating?

Since April last year, landlords are not allowed to let out properties with an EPC rating below E. In the future, this may change to a minimum score of C. Tenants are entitled to request copies of the EPC certificate for the property they are renting, and many will ask about the EPC when viewing a home.

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Property investors must prioritise energy efficiency in rental homes


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