The Demand for Green Properties.
‘The need for buy-to-let properties to be more energy efficient or ‘greener’ is becoming more and more pressing with every passing year’ says Stuart Marshall of Liquid Expat Mortgages. ‘When talking to UK expat and foreign national investors, we’ve often found ourselves talking about the need for ‘greener’ properties in the rental sector. For one, many desirable types of tenant – such as young professionals or new families – are becoming increasingly conscious about the environment and their carbon footprints. This means that they are far more likely to favour a green property over one that is less energy efficient. However, this isn’t the only reason that a tenant might choose an energy efficient property over one that is less energy efficient. Tenants are also favouring greener properties because of their practical benefits – they are far cheaper to run than those which are less energy efficient, and in a world of high inflation and energy costs, this makes all the difference for a renter.’
‘For the long-term success of a UK expat or foreign national investment, improving the energy efficiency of a property is also likely to be a necessity. This is due to the likelihood that legislation will introduce some form of energy requirement for buy-to-let homes. While the government scrapped its requirement for rental properties to have an EPC rating of a C or above by 2025, it’s likely that this plan will be replaced by other, similar legislation – especially if the UK is to reach its target of net zero by 2050.’
Investing in Flats Could Satisfy Green Property Demand.
Recognising both the need and demand for green properties is the first step for UK expat and foreign national investors. The next step is figuring out how to satisfy this demand and deliver green properties into the rental market. There are many ways to do this, but one of the best ways is for UK expat and foreign national investors to invest in flats. But why are flats such a good investment for UK expat and foreign national buyers?
Firstly, flats benefit from the fact that they are newer than many other types of property. Newer builds are typically better than older properties when it comes to their efficiency, with around 85% of new builds achieving either an A or B EPC rating, compared to only 4% of existing properties. This amounts to savings of £3,117.85 a year compared to less efficient properties. From this, it’s clear to see why tenants are drawn to more efficient properties. Flats are also more efficient because of their size. They provide enough room to live, without being wasteful of space, which makes them more efficient since there’s a smaller area to heat and light. They also benefit from their density – because they are insulated from the surrounding flats in the block so lose less heat. And this density is also another reason why flats are so much greener than other types of property. They provide homes to larger numbers of people while also concentrating these numbers in a highly dense single area. This population density is less wasteful of space and resources, improving the environmental efficiency compared even to denser types of housing like terraced houses.
Further, for UK expat and foreign national investors who invest in flats, they are not only satisfying the demand for greener properties, they are also usually securing an investment property in a prime location. This is because many flats are in towns or cities, which have become highly desirable locations for renters. It’s no surprise then that rents in cities have seen record high rent increases. Manchester, for example, last year saw record high rental growth of 14.8% (£126). And this city centre rental growth isn’t exclusive to Manchester either. London, Glasgow, Edinburgh, Cardiff, Birmingham, Nottingham, Sheffield, Bristol and Cambridge all saw year-on-year rental growth well in excess of 10%. Meanwhile Liverpool, Leeds, Newcastle, Aberdeen, and Southampton also saw growth in the region of 9-10%. This shows the rampant demand for cities in the UK rental market at the moment. This is partly because renters look to be in walkable neighbourhoods with easy access to amenities, but it also reflects the desire for more environmentally efficient properties both for ethical and financial motivations.
There are also many opportunities for maximising the quality of an investment with a flat. One such way is to invest in the property off-plan. Off-plan properties often have bigger discounts than completed properties on the open market and this will mean that UK expat and foreign national investors are able to benefit from bigger rental yields and will see larger capital growth too. Many of the pitfalls of off-plan can be resolved by using an expert UK expat or foreign national mortgage broker as these brokers have knowledge of developers and work closely with agents, ensuring that any investment is secure, and that UK expat and foreign national buyers are getting the best deal possible. Buying off-plan also means that these properties will be protected under the new-build warranties, which can save investors a lot of money as most necessary renovations will be covered for 10 years. By talking to an expert UK expat or foreign national mortgage broker, investors can ensure that they satisfy the demand for greener properties whilst also securing a quality investment and meeting their own investment goals too.
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Phone: 0161 871 1216
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