As the colder months set in in the UK, households are more aware than ever of the rising cost of energy – and it’s something landlords need to be aware of.
Investing in an energy efficient property – or retrofitting an older one – has never been more worthy of consideration for landlords than now. As most households across Britain begin to become hyper-aware of their mounting utility bills, energy efficiency can make a huge difference to the desirability of a rental home.
As a general rule of thumb, although with exceptions, the newest properties tend to be the most energy efficient, meaning cheaper bills. Flats and smaller properties are also cheaper to heat and run than bigger houses, making them even more popular right now to tenants.
Two studies have been conducted recently that both shed light on the current situation, and can be reflected upon by landlords when making investment decisions for the future. One looks at how millennials are now prioritising energy-efficient homes, while the other focuses on changes people are making to save money.
Energy ratings are headline news
New research by Go.Compare Energy has revealed that millennials (generally accepted as those born between 1981 and 1996) are the group of people most likely to be drawn to a property with ‘green’ and eco features, with 60% saying they would be put off by a low-scoring Energy Performance Certificate (EPC).
This compares with 51% of all Brits who would potentially shy away from a home with a low EPC rating. In Generation X (born between the mid-60s and the early 80s), 49% would be put off, while 45% of baby boomers (born between 1946 and 1964) wouldn’t want a low-eco home.
This is key information for landlords, whose properties are most widely inhabited by the millennial age group. Although the data looks at property purchase rather than rental, it is a good indication of priorities, both environmental and financial.
Almost three quarters (72%) of UK adults said a good energy rating would draw them to a property, which is further proof that landlords who market the energy efficiency of their property are much more likely to attract a wider range of tenants.
Gareth Kloet, energy expert at Go.Compare, said: “It’s really positive to see that all ages are attracted to energy-saving home features as we move to a more sustainable future. Millennials paving the way in prioritising energy efficiency is not all too surprising, as they have often led older generations in their adoption of new technologies.
Landlords can look at money-saving trends
The financial squeeze is affecting everyone right now, landlords included. Those who are in a position to make their homes more energy efficient, though, or invest in newer properties, are likely to entice more tenants in the long run – and better rents.
The other study that landlords may take an interest in was conducted by specialist lender Hodge, which looked at how people felt about the current situation in the energy market and how it was affecting their lives and their decisions.
It found that a huge 88% of people are now concerned about rising energy costs. With even more would-be first time buyers potentially holding off and renting for longer now, it is likely that this group in particular will be keen to save as much money as possible on household bills.
The study also revealed that 69% of people have changed how they live. Of these, 86% now turn off unnecessary lights, 65% turn off water while washing their hands, shaving and brushing their teeth, 58% unplug electrical items when not in use, 57% use natural light in the home and 53% take shorter showers.
So for those landlords who are able to market the energy efficiency of their homes, this could be an even greater selling point during the winter months and beyond.