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Published on May 25th, 2023
As a landlord you might want to increase your property’s appeal to tenants or reduce your operating costs and improve your margins. Here we look at the benefits for landlords in improving properties’ EPC ratings vs the benefits for tenants, and how the two interact.
We talk a lot about the benefits to homeowners of improving their home’s insulation or double glazing, or installing a heat pump, and the effect this has on their energy bills or their home’s comfort, but for landlords the benefits can come in quite different forms. As a landlord you might want to increase the property’s appeal to tenants or reduce your operating costs and improve your margins.
There’s also the latest legislation from the government that means all newly rented properties must have an EPC rating of C or above by 2025 (although it looks likely this will be pushed back to 2028). This does mean the onus is on private landlords to make wholesale improvements to their properties’ energy efficiency, and acts as a bit of a stick to the carrot of having more appealing properties.
In this piece we look at the benefits in improving properties’ energy efficiency and EPC rating vs the benefits for tenants, and how the two interact.
If you’re looking for advice on how to make your properties more energy efficient you can book a home assessment with us, where an accredited surveyor will tell you exactly where your property can be improved and provide you with a plan on how to take the property forward and make it more energy efficient. You can book an assessment here.
Contents:
Here we list the main benefits that landlords should consider when it comes to improving their housing stock’s energy efficiency.
Retrofitting a home with energy-efficient features can enhance its market value. Particularly as other property owners improve their houses, not making home improvements may have a negative impact on your properties value. From a letting perspective these changes may attract potential tenants who prioritise lower utility bills and increased home comfort, allowing landlords to potentially command higher rental rates or sell the property at a premium.
The most direct impact of making energy-efficient retrofits, such as upgrading insulation, installing energy-saving appliances, or using smart home technologies, is a reduction in energy consumption and utility bills, which given the current cost of energy, is an increasingly appealing benefit. A selling point for renters is having bills included, so that they know what their monthly outgoings will be. If you’re looking to offer a bills included option, it helps to know they’re as low as possible. This translates to lower operating costs for landlords, which in turn improves cash flow and profitability.
The hassle of changing tenants or having to put your property back on the market can sometimes be unappealing, ideally your relationship with your tenant is good enough that they’ll continue to extend. Energy-efficient home’s provide a more comfortable living environment for tenants by improving insulation, heating and cooling systems, and indoor air quality. Satisfied tenants are more likely to renew their leases, reducing turnover and associated costs for landlords, such as finding a letting agent, or listing your property online.
The big news in the last few months is that all newly-let properties from 2025 will need an energy performance certificate of at least C. Although this looks as though this legislation will now be pushed back to 2028. In order to improve their property’s energy efficiency landlords will need to invest in double glazing, insulation and new heating systems. There’s also the news that exemptions from MEES (Minimum Energy Efficiency Standards) will need to be renewed. This was legislation brought out in 2015 that all rented properties would need to have at least an EPC rating of at least an E. Exemptions can be made if it will cost more than £10,000 to improve the property’s energy efficiency.
The most obvious benefit of retrofitting a home with energy-efficient upgrades, such as insulation, LED lighting, or energy-efficient appliances, is that they can significantly reduce energy consumption and subsequently lower utility bills. This can result in substantial long-term savings for tenants. If tenant bills aren’t included then the appeal of a high EPC rating will drive interest in your property as a landlord.
Energy-efficient retrofits improve the overall comfort of a home. Better insulation regulates temperature and reduces drafts, while upgraded heating and cooling systems provide consistent and efficient climate control. These enhancements contribute to a more pleasant living environment. This not only makes a property more appealing to tenants in the first place but means their experience during their time there is more enjoyable and improves landlord-tenant relationships. Improved living conditions mean better health and wellbeing for the tenant which means they can live and work without impediment. This means a lower threat to their income too and better financial security.
Retrofitting a property with energy-efficient features helps reduce home carbon emissions and the ecological footprint. If tenants are using less energy to power and heat a home they’re reducing the amount of carbon emitted in order to power it. Measures such as improved insulation and double or triple glazed windows can drastically reduce household emissions. Clean generation such as heat pumps and solar also mean that little to no emissions are created in the creation of energy for the home. By decreasing energy consumption that’s reliant on the grid and fossil fuels, tenants and landlords alike can contribute to environmental preservation.
Retrofitting a home for energy efficiency can increase its resilience to future energy price fluctuations. As energy costs continue to rise, homeowners with energy-efficient homes are better positioned to adapt and mitigate the impact of increasing expenses. Making these changes sooner rather than later, and doing them wholesale rather than piecemeal also means that landlords can make these changes in a cost effective way rather than waiting for the property to deteriorate or for new legislation to come in. This helps keep up good relations with the tenant.
Embarking on retrofitting your home to make it more energy efficient can be incredibly daunting. It’s difficult to decide what project to tackle first, know which services are reliable and who is charging a fair price. That’s without touching on the many planning requirements that can make retrofitting your home seem all too complicated.
Furbnow is your companion throughout the entire retrofit journey, with the aim of making it as painless as possible. Not only can you enlist us to assess your properties and create a detailed plan of what to improve, we can also organise and project manage the work for you. Driven by giving impartial and actionable advice, we help you carry out the work your home actually needs in the most efficient way possible.
Our Home Energy Assessment is the first step you can take as a landlord towards making your home more energy efficient. It starts with an accredited retrofit assessor inspecting your property, identifying the current performance of your home and how best it can be improved. They then draft a customised home energy plan. This is detailed with fully costed recommendations and a clear action plan outlining the next steps to be taken that best align with your budget.
Following the assessment, we’re here to assist in your retrofit project in whichever way best suits you. Whether this be organising all the contractors and project managing energy efficiency installations, or purely acting as your advisor, our aim is to make this process as straightforward as possible for landlords.
Once our retrofit changes have been installed, we use smart meter data, air quality, and temperature sensors to monitor the effectiveness of retrofit improvements made throughout your home. By using this technology, we can track your return on investment through the energy and emission reductions.
If you’re looking for advice on how to make your properties more energy efficient you can book a home assessment with us, where an accredited surveyor will tell you exactly where your property can be improved and provide you with a plan on how to take the property forward and make it more energy efficient. You can book an assessment here.
Written by
Oisin Teevan