Energy efficiency now a major priority for investors

Some 82% of landlords, investors and brokers said environmental friendliness and energy efficiency were in the top three considerations – along with rental yield and capital growth.

The government is looking for all rental properties to have an ERC rating of C and above by at least 2030, though this target could be brought forward to 2025 for new tenancies.

Andy Button, head of investment finance at Hodge, said: “The buy-to-let market is particularly buoyant right now with demand continuing to grow throughout the pandemic, and it’s interesting to see how the priorities for landlords are changing when looking to add to their portfolio.

“While rental yield and potential for capital growth are, of course, top priorities our research reflects a change in mood of the market, where sustainability and green credentials are becoming ever more important.

“According to a recent Savills report, 26% of people considered the environment the most important issue facing the country and, according to Opinium research, 78% of the public believe they have a personal responsibility to deal with the climate crisis – many of these people will be renters.

“Therefore, to stay competitive landlords can’t ignore tenant preference; they, along with developers and estate agents, are having to provide choice in sustainable housing options.”

Lenders are starting to introduce products with better rates for greener homes, including Virgin Money.

Rightmove research earlier this month found that around 1.7 million homes in England and Wales have homes with an EPC rating between D and G, which cannot be improved to a C rating.

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