Research from Mojo Mortgages has highlighted five upgrades that can increase the value of rental properties (and homes), help attract tenants and potentially unlock better mortgage deals.
Released to coincide with World Environment Day, the findings are based on property, valuation and energy-efficiency data from sources including Zoopla, Land Registry transaction records and a range of industry specialists.
The improvements include heat pumps, solar panels, smart home technology and insulation, some of which could increase property values by up to 7%.
Install a heat pump
Heat pumps are becoming an increasingly common alternative to traditional gas boilers as the housing market moves towards lower-carbon heating systems.
Although installation costs can be significant, the Boiler Upgrade Scheme currently offers grants of up to £7,500 towards the cost of fitting an air source or ground source heat pump.
For landlords, the attraction goes beyond environmental credentials. Properties that already incorporate modern heating systems may be more appealing to prospective tenants and future buyers who want to avoid the disruption and expense of upgrading later.
According to Mojo Mortgages, heat pumps can add between £5,000 and £8,000 to a property’s value, although actual returns will vary depending on the property and location.
Improve insulation
Insulation is one of the most effective ways to improve a property’s overall energy performance.
Loft, cavity wall and solid wall insulation can help improve EPC ratings while making homes more comfortable to live in. Stronger EPC ratings are becoming increasingly important as buyers, tenants and lenders place greater emphasis on energy efficiency.
Mojo Mortgages says insulation can add between £4,000 and £10,000 to a property’s value and offers one of the strongest returns on investment among energy-efficiency upgrades.
It can also help future-proof rental properties as minimum energy-efficiency requirements continue to be debated by policymakers.
Solar panels and battery storage
Solar panels have become one of the more common property upgrades in recent years.
Combined with battery storage, they allow homes to generate and store electricity while reducing reliance on the grid. Properties can also benefit from the Smart Export Guarantee, which enables excess electricity to be sold back to the network.
Solar panels provide a visible sign that a property has been modernised and can help differentiate it from competing stock. Mojo Mortgages says homes with solar panels can command a premium of 6% to 7%, equivalent to around £14,000 to £16,000 on an average property.
Upgrade to smart home technology
Not every value-adding improvement requires a major outlay.
Smart thermostats and energy-management systems allow occupants to control heating remotely, monitor energy usage and manage temperatures more efficiently. Features such as smartphone controls and zoned heating are increasingly familiar to tenants and can help a property feel more modern.
While these systems may not dramatically increase a valuation on their own, they can improve a property’s appeal and help it stand out in a competitive rental market.
Replace ageing windows
Older windows can affect both the appearance and performance of a property.
Upgrading to modern double or triple glazing can improve thermal efficiency, reduce outside noise and enhance security, while also giving a property a fresher appearance.
This combination of practical and aesthetic benefits can make a property more attractive to prospective tenants while supporting long-term value growth.
Mojo Mortgages estimates that upgraded glazing can add between £5,000 and £9,000 to a property’s value.
Mortgage boost
Many lenders now offer green mortgage products that reward energy-efficient properties through lower rates, cashback incentives or additional borrowing for improvements. Eligibility is often linked to EPC ratings, with the strongest incentives typically available on the most energy-efficient homes.
Kayleigh Jackson, Mortgage Sales Manager at Mojo Mortgages, says lenders increasingly view energy-efficient properties as lower risk because they are typically cheaper to run, which can reduce financial pressure on borrowers.
She adds: “Whether you are looking to secure a more competitive interest rate via a Green Mortgage today, or trying to make your home stand out in a crowded property market tomorrow, investing in your EPC rating is one of the smartest financial moves a homeowner can make.”
World Environment Day takes place on 5 June. For more information, you can visit the World Environment Day website.
