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Are Buyers Interested?
Legal & General surveyed over 2,000 potential buyers and found that energy efficiency is now a key factor when choosing to buy or rent a home. Over 50% of people said that they would be more likely to search for a property with high energy efficiency ratings. Furthermore, more than a third said that they would be happy to pay an additional cost.
First-time buyers are particularly interested in energy efficiency. Over 60% of first-time buyers said that they would be far more likely to buy a home that is energy efficient. Additionally, over 40% said that they would be willing to pay more for a high EPC rating. This is a positive sign for investors as attracting young professionals to a rental property with high efficiency could be easier due to the high demand.
Why the Demand?
The growing demand for energy-efficient homes has been pushed by the rise in energy bills. This is because the rising energy prices are making it far more expensive to heat and cool homes. Therefore, buyers are looking at different ways to reduce their energy bills. In addition, there is increasing awareness of the impact of carbon emissions, and as a result, buyers are looking towards sustainable living.
The demand for energy-efficient homes is good news for investors. It means that they are able to command high rents for energy-efficient accommodation. Additionally, with the new EPC criteria coming into effect, landlords will be forced to improve the sustainability of their property.
How to Improve Efficiency
If an investor is looking to improve the energy efficiency of their property, there are a number of things they can do to improve energy efficiency. This includes installing insulation, double-glazing, and energy-efficient appliances. Property owners can also get a home energy audit to identify areas where they can make improvements.
Making the property more energy efficient is a good investment for both investors looking to sell and landlords looking for tenants. It can save tenants money on their energy bills and reduce their carbon footprint. By improving the efficiency of the property, the investor may be able to command higher rents or increase their capital appreciation.
The demand for energy-efficient homes is clearly very high right now. This means investors can capitalise on the latest market trends by securing energy-efficient properties. By doing so, they can benefit from high tenant demand, higher rental income and capital appreciation.
Since all landlords will need to be achieving high energy efficiency ratings by 2025, current investors could get a head start. They can do this by improving their energy efficiency ratings sooner and therefore, attracting tenants or buyers faster than the rest of the market. Additionally, investors can benefit from buying cheaper properties at below-market value which do not meet the new criteria and invest further to bring them up to the new standards.
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