Energy Efficiency over Innovation
Potentially, demand may fall for old and in efficient buildings. Prices maybe more appealing generally but do bear in mind that it could cost you more in the upkeep of the property in the long run, making sure the property is well insulated has all the necessary current running systems to make it energy efficient.
In the current climate, more and more emphasis has been on becoming more energy efficient and to prevent climate change.
With this in mind it is now known that on properties that are tenanted there is a minimum EPC grading, an E rating or higher. However, you can choose whether to have these improvements carried out or not. If the property has an F or G rating then you will need to carry out the requirements to bring it up to an E rating. Otherwise a rental income can not be generated from the property.
What do others think?
Majority of countries globally have agreed to undertake to decarbonise its built environment. The government’s net-zero target for 2050 may seem a long way off, but big changes are currently taking place.
Approximately 25% of CO2 emissions come from the built environment. With the focus being on residential property – whether it be owner-occupied or tenanted.
The majority of landlords, property investors and tenants are now much more aware of the importance of EPC’s, with tighter rules coming into force. This is for both residential and commercial properties from 1st April 2023. This means that it will include commercial properties and be unlawful for a landlord to continue to let a property with an EPC rating of less than E. Even more stringent rules are expected in 2025 and 2027.
For some landlords and investors, obtaining a cheaper property could seem like a good strategy. With the old saying of “Spend less and if you secure a strong rental income, the better the yields”. Tenants will often be willing to pay more to get a more energy efficient home.
Land sales appear to be on the rise, with the general property market looking at the added potential for future development. Whilst we are battling climate change and now the cost of living crisis. One of the options that investors are looking at, is potentially for agricultural use, as well as wind or solar farms could also be a possibility. Of course subject to the necessary planning consents, which is another hurdle that should over time become more flexible.
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