3 reasons why property investors should choose energy efficient homes


From traditional buy-to-lets, to conversions and new-builds, prospective property investors must look at all the options when seeking out a new rental property. But there are a few reasons why an eco-friendly home wins out.

Landlords and property investors often approach buying a new investment in a variety of different ways. For some, the lowest possible price point is key, while long-term return on investment prospects are more important to others. While many will focus on a particular target tenant, others like to ensure their property is equally inviting to all renters.

One issue that is uniting people globally at the moment is the environment. Below are some key reasons why this could be something to consider for a property investment.

1. Green mortgages

A number of lenders are now offering preferential rates for mortgages in energy efficient homes. This can mean big savings for buyers who invest in the most eco-friendly properties – which will normally be a new-build or new conversion. Leeds Building Society and West One Loans are the latest lenders to add to this niche product range.

The West One Loans products are available on homes with an EPC rating of A to C. They are offering deals for 65% and 70% LTV initially, from 3.04% with a 1.35% fee. While they are currently not available for new-build homes, those investing in converted properties can benefit. There is also scope for the lender to add to its product range in the future.

Andrew Ferguson, managing director of West One’s BTL division, said: “It’s an important step in terms of bringing those properties into line with the standards required for a more sustainable and carbon neutral property market.”

2. Enticing tenants

The key to success in the buy-to-let business is the tenant. Securing “good”, long-term tenants in a property minimises void periods, as well as hassle and extra costs. And today’s tenants are increasingly attracted to rental homes that are eco-friendly and energy efficient.

A survey from Direct Line for Business found that as many as a quarter of Brits would leave, or refuse to consider, a home with poor environmental credentials. Three quarters said that this aspect was important when looking for a rental home.

A highly energy efficient house is also extremely attractive in terms of cutting energy costs for tenants. As utility bills continue to rise, a property installed with energy saving fixtures and fittings could make it stand out from the rest.

3. More sellable

When it comes time to sell, a newer home with a top EPC rating is likely to attract more buyers. For the same reasons as listed above, eco-friendly qualities make a property look like a better buy. New-builds often come with a 10-year insurance policy, too, adding extra piece of mind to anyone who buys within that time frame. Newer properties also have the added benefit of being already modernised, so refurbishment is often not necessary.

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3 reasons why property investors should choose energy efficient homes


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