How UK Expat Buy-to-Let is Changing with the Cost-of-Living Crisis

cost living new builds

As a result of the cost-of-living crisis, many renters are looking towards new builds to save on their energy bills.

Energy Efficiency a Key Concern in Cost-of-Living Crisis.

The cost-of-living crisis and rising energy bills are changing the way people consume property products. For home buyers, new builds are proving to be the most popular products with energy efficiency weighing on their minds. Renters too are looking towards new builds with higher EPC ratings to minimise their energy costs. Similarly, for UK expat and foreign national buy-to-let investors, energy efficient properties are incredibly popular as the need to have a property that is compliant with the incoming EPC rules grows more pressing. ‘Many of the conversations we are having are revolving around the energy-efficiency of properties’ says Stuart Marshall of Liquid Expat Mortgages. ‘As UK expat and foreign national investors race against time to make sure their investments achieve EPC ratings of at least a C, new-build properties are looking increasingly attractive. According to Zoopla, 80% of new build properties have an EPC rating of an A or a B. This compares to just 3% of older properties. Consequently, new builds will often bypass any of the issues that come with renovating older, less energy-efficient properties and this makes them an attractive proposition for UK expat and foreign national investors hoping to avoid a project.’

‘New builds are attractive not only because of the lack of necessary renovation but also because they are enticing to potential renters’ says Stuart Marshall. As the cost-of-living spirals, renters are increasingly looking for ways to keep costs down and, with energy proving more and more expensive, one of the best ways to reduce costs is to move to a more energy efficient property. According to the government’s EPC data, new builds have a running cost of up to 52% less than an older property of comparable size. The Homes Builders Federation has similar findings, reporting that occupants of new builds save an average of £629 per year compared to those in older homes. Obviously, this is incredibly attractive for many renters as the cost of renting property increases along with energy prices and inflation. ‘In the current marketplace, one of the best things UK expat and foreign nationals can do is to have an energy efficient property. The saving that energy efficiency presents for renters is now just as enticing as a great location’ adds Stuart.

Further, there is an increasing number in the rental market – particularly among the youth contingent – that are growing ever more conscious about their energy consumption. These conscious consumers are actively pursuing ways to reduce their carbon footprints and when choosing between two properties, energy efficiency could well become a deciding factor. ‘Choosing an energy efficient property does indeed make massive impact to carbon footprints too, with new properties outputting 1.4 tonnes of carbon per year, compared to 3.8 tonnes in older properties.’

The Future.

‘This change in consumption is likely just the start of an energy efficient property revolution. Like it or not, energy-efficient legislation is here to stay and it’s important that UK expat and foreign national investors stay ahead of the curve to minimise costs and remain competitive in an increasingly crowded rental market. New build homes are certainly a good way to go for UK expat and foreign national investors: they have good availability and affordability. They are also extremely mortgage friendly as they rarely encounter some of the problems that older properties have. This makes them an excellent candidate on which to use some of the fantastic UK expat and foreign national mortgage products available at the moment. Other UK expat and foreign national landlords are opting for green renovations, with many utilising green mortgage products to do so. This is also a good option, so long as investors are willing to put the time in to conduct these renovations properly. Older, ‘character’ properties are still very popular amongst renters and green mortgages are an excellent way to get discounted rates when buying such properties.’

Looking to the future, investors will have to have an increased awareness of this change in mindset amongst consumers. Whilst this change has been brought on by a cost-of-living crisis, it will likely last long into the future as consumers becoming increasingly conscious of the environmental implications of their choices. With this in mind, UK expat and foreign national investors will have even more incentive to look toward newer properties to make sure their investment is as simple as possible and begins yielding money straight away. Avoiding costly energy-efficient refurbishments will obviously be beneficial to this end. Off-plan properties will also continue to be of interest for UK expat and foreign national investors. And from 2025, any new build property will produce 75-80% less carbon emissions than homes currently being built. This is as a result of the Future Homes and Building Standard. Not only is this worth bearing in mind for investors, but it also shows the direction of the market legislation. For UK expat and foreign national investors buying environmentally efficient properties now, they are buying an investment which is very attractive for investors in the current marketplace, while also future-proofing their property to ensure earnings for many years to come.

Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Ewood, Blackburn
Phone: 0161 871 1216

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