Sustainable Investing: A Shift in the Market

Category: Green Investment

In recent years, sustainability is a rising priority in the property market, amongst both buyers and investors. Making sustainable investing a key trend to consider to stay ahead of the curve. A new way of calculating EPCs has just been introduced, set to affect property ratings across the board. This article breaks down what’s changed, and what it means for you.

Author: Sophie Hope

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Tenants are Looking For

Sustainable Features

Sustainable investing is becoming increasingly popular due to he demand it receives in the rental market. Due to the rise in energy bills and the younger generations being more environmentally aware, many renters opt for more sustainable options. More sustainable properties tend to be cheaper on bills due to modern technologies enhancing sustainability.

According to the Handelsbanken Property Investor Report 2025, 92% of investors find that tenants are more likely to pay more for sustainability. Additionally, 77% of investors said they have seen a rise in demand for features ensuring higher sustainability, such as solar panels, electric vehicle chargers, and heat pumps.

The landlords in the survey have stated that more than half of their tenants are now requesting electric vehicle charging points, and 47% of the landlords reported that tenants are demanding EPC ratings of C or above.

This shift is affecting how landlords are investing. There is a higher demand for new-build properties of homes that have recently been renovated. This is due to newer properties being more sustainable and having better EPC ratings. Not only are they more sustainable, they are also more future-proofed with the changes in legislation and demand. Getting ahead now will position investors for strong growth and the highest long-term returns due to having a desirable property.

Minimum EPC Ratings

Currently, all rental properties must achieve a minimum EPC rating of an E. This applies to both new and existing tenancies and failure to comply could lead to fines of up to £5,000 per property.

However, the UK government has proposed new minimum standards to EPC regulations for landlords that could take effect from 2025. If implemented, landlords will need to ensure all new tenancies from 2025 meet at least EPC Band C, and all existing tenancies meet Band C by 2028.

While not yet confirmed, these proposed changes to EPC regulations for landlords have already shaped lender criteria and influenced tenant preferences. The market is moving in anticipation.

A New Way to Calculate EPC Ratings

RdSAP 10

An updated strategy as to how EPC ratings are calculated has been introduced. It is an method called RdSAP 10, and this has been implemented as of June 2025. The aim of creating a new way EPCs are measured is to get ratings that are more accurate based on the home.

As part of the new strategy, those who determine EPCs will take into account factors like window glazings, heating systems, heating controls, floor area, insulation types and more. Factors like these will be looked at the efficiency and conditions in more detail to provide a more accurate rating.

The main factors that will have an effect on new calculations will be thermal performance, heating systems, ability to use smart technologies, and energy cost. Therefore, property owners can focus on these when looking at improvements to boost sustainability.

If your property has seen improvements/renovations since the last EPC was calculated, you must provide proof. If there is no evidence to prove there has been any unpgarades then you risk receiving a lower EPC. Whereas, with the old method of measuring EPCs it woud have been based more on just assumptions if its been upgraded.

EPC Ratings for Flats Could Improve

As insulation and heat loss are factored into the new method of calculating EPCs, flats and mid-terrace properties could benefit from higher ratings. Any flats with other properties under them are said to have no heat loss through the floor, improving the EPC rate. Similarly, with mid-terrace properties with other homes at either side, reducing heat loss through walls.