A survey of property investors by Handelsbanken has found that almost all have seen requests from tenants for some form of sustainability measures in the last year.
According to the bank’s latest annual Property Investor Report, 92% of investors (with an average 35 properties each) asking for sustainable features such as heat pumps, solar generation or EV chargers – with over a quarter (28%) requesting the latter.
Furthermore, three in five tenants (58%) have requested properties have an Energy Performance Certificate (EPC) rating of C, with this rising to 88% of tenants in London amid high energy costs. Current government regulations in England require all residential and commercial rental properties to have an EPC rating of E or above before being let to tenants. Previous plans to raise this to minimum of C by 2028 were scrapped last year, however, 44% of landlords surveyed plan to continue with investments anyway.
The findings also show that landlords would welcome changes from the government at a legislative level despite the costs: a staggering (72%) of respondents would welcome new rules raising the minimum Energy Performance Certificate (EPC) rating to A for commercial and residential lettings – the highest level achievable.
Richard Winder, UK Head of Sustainability at Handelsbanken said:
“Property investors are clearly recognising the long-term value of maximising energy efficiency across their portfolios, and are eager to meet the highest sustainability standards to capitalise on the commercial benefits. Locking in value, reducing operating costs, and attracting and retaining tenants are all front of mind for investors – research suggests that assets with the highest EPC ratings enjoy considerably longer lease lengths.”
The bank says it is also seeing an increased appetite from investors on either developing or acquiring properties with better EPC ratings based on the green financing initiatives offered by banks discounting loan margins.
The findings of Handelsbanken’s 2024 Property Investor Survey, and previous years’ surveys, are available to read online here.
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