New research shows that environmentally friendly landlords can attract far more tenants. There are a number of factors that come into play, but higher demand for sustainable solutions and a desire to cut energy costs are at the top of the list. Some tenants may even be willing to pay a premium for green building options.
Landlords Face Increased Pressure to Provide Green Housing Options
Prospective tenants are more concerned with sustainability than ever before. Landlords have no choice but to adapt to a changing market and improve the energy efficiency of the properties they are letting. This is going to become an even greater concern as climate change and geopolitical uncertainty in the energy markets create more variance in energy prices in the years to come. Since this will be a growing concern through at least 2025, landlords will be under even more pressure to address it in the coming months and years.
A survey by Your Move has found that more than two fifths of tenants in the UK (42%) say that they consider how eco-friendly a property is before reaching a decision on where to rent. Interestingly, this figure rises to half of tenants in London. Many large cities place a growing emphasis on green building solutions, because they:
- Face steeper energy costs than their counterparts in the rest of the country.
- Must deal with a lot more pollution, which is threatening their quality of life in very serious ways.
There is a positive correlation between the importance of green credentials and the level of rent paid by tenants. One poll found that 63% of tenants paying between £1,351 to £1,600 per month state that an environmentally friendly home is a number one factor when choosing where to rent. This is compared to just 37% of renters paying £350 a month of less. This may be due to the fact that they feel they will need to pay a premium for green housing. However, a growing number of people in lower income brackets are likely to prioritize green housing as energy costs skyrocket.
In an increasingly competitive environment, considering the environmental impact of a rental property is a key way for landlords to attract more tenants, particularly as the number of renters across the UK continues to increase as homeownership levels fall.
With energy efficient properties taking on more prominence in the rental sector, from April this year a new rule was introduced. This rule ensured landlords will need to ensure their buy-to-let properties in the UK have a minimum energy performance certificate (EPC) of E on any new tenancy or privately let property. This is a measure of energy efficiency in a home and affects the tenant’s utility bills as well as the environment. When the tenancy has no change, landlords will have until 1 April 2020 before the minimum rating rules apply to all existing tenancy agreements.
The survey concluded that 32% of renters were interested in a communal garden, while 30% would be happy to pay extra for a vegetable allotment, proving that green space presents an important factor in a tenant’s rental decision. RW Invest, a property investment company based in Liverpool, offer a selection of buy-to-let student and residential properties. In particular, One Islington Plaza offers a central courtyard and landscaped gardens for tenants to enjoy.
In London, rental households can expect to pay as much as 20% per month if they have a garden, this is likely to be the same in cities such as Liverpool, Manchester, Birmingham and Leeds. Ultimately, landlords who can offer green space as well as proof that their properties have elements of being eco-friendly, will find themselves as an increasingly popular choice for tenants.
Evidently, maximising the eco-potential of a property can decrease a tenant’s monthly bills and increase the value of the property. Not only will an environmentally conscious landlord contribute towards global conservation efforts, but their green properties are considered more desirable by renters.
Demand for Green Housing Will Likely Rise in the Near Future
The demand for green housing options is going to continue to rise as environmental concerns mount. This is a boon for landlords, but only if they are astute enough to take advantage of these opportunities.