COP26 Impact on the Property Investment Market 2022
The UK is leading the way in curbing Co2 emissions and achieving net zero by 2050, with ambitious targets and commitments following COP26. So what impact will this have on the buy-to-let property investment market in the UK?
Housing accounts for 14% of the UK’s emissions, with insufficient insulation and inefficient gas boilers being two of the main contributors.
Buy-to-Let Property Minimum Energy Efficiency Standards
The existing minimum energy performance rating required for a rental property is ‘E’ or better, which will change to ‘C’ or above for new tenancies from 2025 and existing tenancies from 2028. If the property landlord does not meet these requirements, they could be fined up to £30,000 per property.
Buy-to-let investors will need to make improvements to their rental properties to ensure that they meet these new standards and avoid being fined. This will mean improvements such as upgrading glazing, insultation and switching gas boilers for more energy-efficient boilers or heat pumps. All of these fundamental improvements to achieve the new minimum energy rating standards will be costly and currently there are no plans by the government to provide financial support to property investors.
New Build Property Investment
New build properties already have to meet strict energy performance standards and will rate much better than older properties; therefore, buy-to-let property investors will need to weigh up the cost of upgrading a property’s energy efficiency with the cost of buying a new build. Property investors who are expanding their property portfolio will now have the energy performance of that property at the top of their priority list when assessing the viability of the investment to avoid any unexpected cost in a few years’ time.
Major lenders are backing greener developments, with Aviva making £1 billion available over the next four years to lend for sustainable development.
Green, sustainable homes are now a major priority for property investors, lenders and property developers and green thinking is the core of the new build property sector in 2022.
New build property has never been more appealing to buy-to-let investors, with the ability to buy a fully compliant, energy efficient property, avoiding the cost and hassle of upgrading a rental property by 2025 to avoid being fined.
Off Plan Property Investment
Regency Invest have a wide range of new build energy efficient properties for investment in areas of high capital and rental growth, including:
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