Reported plans to require heat pumps and solar panels in all new homes are sharpening the case for developers and landlords to invest in greener properties, with fresh research suggesting tenants are prepared to pay more for energy-efficient homes.
For the bridging and development finance market, the direction of travel is becoming clearer as sustainability shifts from a value-add to a more central part of scheme design, refurbishment planning and long-term rental strategy.
BuyAssociation said 92% of investors believe tenants are willing to pay more for eco-friendly homes, underlining what it sees as a growing commercial case for landlords to improve the environmental performance of their stock.
Caroline Marshall-Roberts, founder of BuyAssociation, says: “Over the past few years, we’ve seen a big increase in demand for greener living. This is partly due to the government’s net-zero push, but also because energy bills have gone through the roof.
“With the cost of living rising, tenants are thinking more carefully about their bills. This is especially true for those on lower incomes or trying to save for a deposit. In many cases, paying a bit more for green features is worth it, as the long-term savings on utilities can be substantial.
“Properties with energy-saving features are advantageous for landlords as well. In competitive markets, these properties tend to be rented out faster, leading to improved returns and reduced vacancy periods.”
The argument will be familiar to developers and lenders already active in refurbishment and ground-up projects, particularly where exit strategy depends on tenant demand, rental resilience and future compliance.
BuyAssociation said greener homes can help attract longer-term tenants, particularly young professionals and families seeking lower running costs and a more efficient home. For landlords, that can translate into lower voids, reduced churn and potentially lower management costs.
The firm also said sustainable features such as solar panels, insulation and car charging points can support stronger rents where tenants see a clear benefit in lower utility bills.
For property professionals weighing up refurbishment costs, the timing may be significant. As policy and regulation continue to evolve, early investment in energy-saving measures could reduce the need for more expensive retrofit work later, while also helping landlords and developers position assets more effectively for refinance or sale.
Marshall-Roberts said such improvements may also support access to green finance, giving borrowers another route to fund wider upgrades across a portfolio.
She also pointed to operational benefits, arguing that some green features are built with more durable materials and smart systems that can identify faults earlier, potentially reducing maintenance bills over time.
As build standards tighten and occupiers become more conscious of energy costs, schemes that can demonstrate lower running costs and stronger environmental credentials may stand out more clearly in a crowded rental market.
That is likely to matter not just for landlords, but also for developers assessing product mix, specification and eventual exit value in an increasingly selective market.
