A recent report has found that investors are becoming increasingly concerned with the impact of the proposed changes to EPC ratings on homes.
According to Rightmove, many property investors have turned their attention towards future-proofing their investments, with around 61% saying they would not even consider buying any property with an EPC rating lower than C.
To compare, the same survey from 2022 saw just 47% of respondents answer similarly - showing the pressing concerns surrounding sustainability and energy efficiency in the property investment market.
Despite plans to increase the minimum energy efficiency guidelines remaining unfinalised as of July 2023, it's clear that many investors are looking to stay preemptively ahead of the curve.
If accepted, these new standards could see landlords that fail to upgrade their properties to at least a C rating seeing fines up to £30,000 or higher.
The best way for investors to prepare for this is by future-proofing their current properties or purchasing new builds with the latest eco-friendly technologies.
Not only will this appeal to any potential tenants, but it will also help bring greater capital appreciation and a more lucrative exit strategy further down the line.
1) Solar Panels
Solar panels are probably one of the most well-known pieces of sustainable technology and will typically feature in most eco-centred properties.
According to Savills, the modular fit of solar panels make it 'the perfect fit for real estate', with its relatively easy installation being one of its greatest strengths.
Research conducted by the Energy Saving Trust states that installing solar panels could also increase the value of a UK property by an average of 4%.
Considering the average-priced home in the UK, which was around £286,489 in April, investors could add over £11,000 to the value of their property just by installing solar panels. Property investment company RWinvest have confirmed that future proofing your property can increase the value significantly.
If an investor is looking to sell their property further down the line, the addition of solar panels could also make it more attractive to potential buyers, with the prospect of lower energy bills and reduced environmental impact being excellent selling points even in this current climate.
While implementing solar panels can be a great way to boost a property's value, it's only worth as much as the quality of the installation.
If done incorrectly or haphazardly, it can be particularly costly to repair or replace, and if left unchecked, and could drastically impact property value.
The location of the property also plays a massive role. Suppose a solar panel is placed in an area with very little sunlight, for example. In that case, the benefits of the technology will be less than if it were in a sunnier place with exceptionally high electricity costs.
2) Roof Insulation
If a property is well insulated, it becomes more energy efficient.
Insulation will retain heat during the winter, and prevent heat from entering a property during the summer, drastically cutting down on energy bills.
Roofing insulation will also reduce the growth of mould, with it filling the gaps between the ceiling beams and frameworks of the property. This will ensure that mould and other bacteria cannot see the conditions needed to thrive and spread.
Having procedures in place to prevent mildew growth will be especially attractive to any potential tenants, as well as drive up the value of the property.
Insulation will fortify the property, keeping it in good condition in the long term. Again, this means that investors can expect an increase in value, which will be massively helpful when they look towards selling their property in the future.
3) Smart Heating System
Smart heating systems are another method of optimising energy consumption.
These systems will ensure that no energy is wasted by intelligently adjusting heating patterns based on occupancy, current weather conditions, and user preferences. As a result, landlords can significantly reduce the energy consumption of their properties, lowering their energy bills and carbon footprint.
Additionally, smart heating solutions like these usually provide owners with energy usage reports and recommendations, allowing them to see a property's energy output and further reduce expenses if needed.
These systems are also designed to learn from tenant behaviours and preferences, using advanced algorithms to analyse the patterns of occupants and area-specific weather conditions over time.
From this analysis, the system can proactively adjust settings to optimise output and ensure that optimal energy efficiency is achieved. Over time, as it becomes more familiar with household routines, it can automatically adjust the temperature accordingly, which will undoubtedly provide another unique selling point for potential tenants. Why not read about the latest guide to serviced accommodation with RWinvest's report.
As machine learning develops, smart heating systems may become even more intelligent and adaptive. Likewise, as technology advances, future versions will be able to integrate seamlessly with renewable energy sources such as solar panels or geothermal systems, further improving EPC ratings and reducing reliance on traditional energy sources.
4) Energy Saving Lighting
Energy-efficient lighting is designed to minimise overall power consumption and, in many cases, can lead to much lower energy costs.
By replacing older lighting technology with newer, more sustainable options, investors may be able to cut down on bills drastically.
Switching to energy-efficient lighting can include:
Around 15% of an average household's energy consumption is taken up by lighting, something which can be massively improved with the implementation of energy-efficient lighting.
Switching to LED/CFL lighting can bring some huge savings. For example, an LED bulb can save landlords up to £6 per year in energy costs - which could seem relatively low, but it all adds up! The overall consumption of electricity used for lighting might be reduced, which will help with costs immensely.
5) Heat Pumps
Heat Pumps can be a great way of providing hot water at a much lower energy rate than standard methods.
There are two types of heat pumps:
Ground Source Heat Pumps circulate antifreeze and water through a series of pipes, with the heat from the ground absorbed into the fluid.
This mixture then passes through a heat exchanger and pump and can be used in radiators, underfloor heating or hot water.
The temperature below ground remains the same throughout the year, making it reliable throughout all seasons.
Air Source Heat Pumps, on the other hand, extract heat from the outside air. This heat is then absorbed into a fluid, which is passed through a compressor that increases its temperature. You can use an air-to-air heat pump for heating or an air-to-water pump for hot water.
6) Water Conservation
According to Water UK, the average person in the UK uses 142 litres of water per day, with an average family household using about 500 litres in the same amount of time.
However, there are some ways that homeowners can reduce this cost - either externally or by themselves.
Rainwater Harvesting Systems
Rainwater recycling, also known as rainwater harvesting, is when rainwater is collected, filtered, and used towards the building's water source.
The good news is that the UK sees plenty of rain, so installing a system like this is bound to be a good investment.
The rainwater is collected from the roof of a property, filtered, and stored in a tank underground. The water collected can be used in various ways, including topping up the toilet cistern.
Using rainwater harvesting decreases overall reliance on sourcing water from the mains, making use of a resource that would otherwise be wasted and can reduce bills dramatically.
Changing taps to low-flow aerators or showerheads can save a significant amount of water.
Installing systems like automatic shut-off devices that stop the shower after a particular time or once a specific amount of water has been used can also help reduce these costs.
Domestic appliances take up a considerable amount of energy in a typical household.
Investors can reduce this by buying more energy-efficient models and ensuring tenants use them in the most sustainable way possible.
Devices with an Energy Star label are the best ones to consider, as this means that the Environmental Protection Agency has rated it as particularly energy efficient.
Newer appliances like energy-efficient fridges utilise the latest innovations (such as LED lighting) to reduce energy bills and overall carbon footprint.
Additional Methods to Future-Proof Your Property
Other ways for investors to ensure their property is as energy efficient as possible include: