Why tenants want energy efficient homes
Tenants pay more for ecofriendly homes, but if you don’t comply you risk a fine of up to £5,000
Tenants want a home that’s warm, comfortable and cost-efficient to keep that way. But there are also an increasing number who want to make sure they’re keeping their carbon footprint as low as possible and conserving resources for the good of the planet.
Climate change is a particular concern for millennials, up to a third of whom could be renting indefinitely.
According to one private rented sector tenant survey, 42% of tenants say they take a property’s environmental credentials into account when making a decision about where to live – rising to 50% for tenants in London. Among high-rent tenants paying between £1,350 and £1,600 a month, this figure increases to 63%.
In another survey, of 1,000 25 to 40 year olds (half homeowners, half renters), 49% said they would be more likely to buy or rent an eco-conscious home.
When asked if they would be prepared to pay more for sustainability features, 28% said they would pay up to 20% more and 22% would pay a premium of up to 30%.
James Tanner adds:
Where we are today is that tenants are starting to make choices based on a property’s energy efficiency. They’re very conscious of the cost of energy bills and they are asking how much they are, and what energy efficiency measures have been installed. So, for landlords, the more efficient you make your property the more demand you’ll have, the more rent you’ll achieve and the less void periods you’ll have to deal with.
So, if you’re trying to attract high-income tenants, young professionals or eco-friendly renters, it’s time to focus on how you can make your property more energy efficient.
Making your rental property eco-friendly is something that you’re going to be hearing about a lot more over the coming months and years.
Firstly, there are the current laws in England (as at November 2023) that you need to abide by. That’s principally not letting a home unless it has an EPC certificate of ‘E’ or above – and this applies to both new and existing tenancies.
If you fail to meet these requirements now and your property isn’t exempt, you could end up with a fine of up to £5,000.
Although, as mentioned, the Government has done a U-turn on plans to introduce a minimum EPC rating C for all tenancies, if you’re planning to make any renovations to a rental property now or in the near future, it would still be a good idea to work out what more you could do on the energy efficiency front to bring your property up to an EPC rating C rating so that you are prepared should the plans be reinstated.
Doing this will have the added advantage of reducing your tenants’ utility bills, meaning they will have more money to pay your rent and will hopefully stay in the property for longer. Always try to think of eco-friendly upgrades to your rented property as an investment with a return, not just a cost.
For example, a report by Sustainable Homes on social housing, found that improving energy efficiency could also benefit landlords by reducing rental arrears and voids.
Cold homes, on average, had two more weeks of rent arrears each year, compared to more efficient homes.
And the research also showed that voids reduced as homes got more energy efficient, with 31% fewer voids in properties rated ‘B’, compared with those rated ‘E’ or ‘F’.
Read more on the current Minimum Energy Efficiency Standards (MEES).
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