In order to help meet its net zero target by 2050, the Government is tightening the energy standards that buy-to-let properties must meet. Many landlords with low EPC ratings will have to make significant eco improvements to comply with incoming regulations – that’s a minimum C rating for new and renewing tenancies by 2025, which will be applicable to existing tenancies by 2028. For many landlords, the only way to reach the new standard will be to make eco improvements to their buy-to-lets.

Younger renters keen for green

As well as meeting new compliance standards, eco improvements can have a positive effect on your investment property. Research from E.ON has found that younger tenants are eager to rent an eco-friendly home. In fact, more than three quarters of renters aged 16-27 say more energy efficient properties are a priority, putting this quality up there with location, transport links and outdoor space in terms of importance.

As well as being more desirable, eco-friendly rentals can achieve a greater rental value. Four in five respondents to E.ON’s survey aged 16-41 said they would be happy to pay more for a property with solar panels, a heat pump or electric vehicle charger.

Help is available

If you need your properties to be more energy efficient – whether that’s in relation to improving an EPC rating or in order to attract tenants – there will be a cost attached. The Government is trying to help in the shape of two initiatives introduced in April 2022.

The new Boiler Upgrade Scheme offers a grant of £5,000 towards the installation of a new heat pump. In addition, VAT has been removed from eco products like solar panels, heat pumps and insulation.

The price of improving

Despite the assistance available, the most popular eco improvements carry a significant cost. Below as some basic figures and LandlordBuyer recommends you take advice from a registered installer to get an accurate price:-

  • Air source heat pumps take the air from around your home and convert it into energy to heat your home and water. They cost around £10,000 to buy and install, before the Government help. You may find you also need to improve insulation to contain the heat produced and install larger radiators, as air pumps provide a lower level of heat compared to gas boilers.
  • Harnessing the sun’s energy is increasingly popular but the cost of solar panels depends on a range of factors, including the type of panels, how many you need, the type of building they are attached to and the quality of the components you buy. Installing solar panels on a property would cost around £5,000-£8,000.
  • Most homes built between the 1920s and 1990s have cavity walls that result in a gap between two layers of brick. If the cavity isn’t filled, heat can leak out, wasting energy and money. Installing cavity wall insulation is fairly quick and easy – small holes are drilled into the exterior brickwork and the insulating material is injected into the gap. Costs depend on the property size but generally it costs around £200 for each two storey wall.

LandlordBuyer can help

Our list of three popular eco improvements isn’t exhaustive as we haven’t touched on glazing, draught-proofing, electric vehicle charging points or low-energy lighting. If you find it’s too expensive to upgrade your buy-to-let to meet incoming energy efficiency standards, you may need to rethink your investment strategy.

LandlordBuyer offers investors a way to dispose of energy inefficient and unmodernised buy-to-lets, even those with EPC ratings of E, F and G. We also buy houses and flats with expired EPC certificates. Get in touch for an instant cash offer and to talk through the process with our team.

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