Around nine in 10 property investors say they are spending more on sustainability features across their property portfolio after a survey revealed plans to spend more on energy efficiency measures,
Handelsbanken’s fifth annual Property Investor Report, which surveyed 200 UK real estate investors, property management professionals and landlords, identified sustainability is becoming a core part of long-term asset management rather than a standalone environmental consideration with of 89% of property investors saying they’re increasing the amount they’re allocating to strengthening energy efficiency ratings ahead of the minimum Energy Performance Certificate (EPC) rating of Band C by 1 October 2030.
EV charging, cited by 50%, smart meter or smart home technology, cited by 47%, and solar panels, cited by 43%, suggest tenants are looking beyond a broad “green” label towards homes with infrastructure they can see, use and understand. For landlords, the upgrades most likely to resonate are those that connect sustainability with lower running-cost potential, convenience and future-ready living. The report also found that 68% of landlords believe renters are prepared to pay more for greener buildings. This is down from the previous report where 92% of the panel reported the same. Perhaps although sustainability features remain commercially relevant, they are now expected by discerning tenants rather than seen as nice-to-have extras.
They also remain upbeat about the property market with more than respondents last indicating they plan to maintain or increase their portfolios.
Richard Winder, Head of Sustainability at Handelsbanken, commented: “Climate change had already become a mainstream commercial consideration for property investors. But further energy price shocks, weather extremes and the tumbling cost of clean technologies have only made the case more compelling and urgent.
“Regulations will continue to tighten towards net zero, but it’s market demand that’s accelerating action today. Tenants are placing greater value on buildings that are efficient, comfortable and resilient. Investors are modelling how their assets will perform over the next decade or more, with the future cost and availability of insurance added into the mix. This is all driving rental and valuation outperformance for more sustainable buildings, and we expect this trend to intensify. “For many landlords, sustainability investment is no longer just about meeting standards. It is about ensuring properties remain competitive, attractive and fit for the future.”
Handelsbanken added the results reflected the fact that sustainability is becoming a core part of long-term asset management rather than a standalone environmental consideration. Indeed, encouraging landlords to be more proactive, the bank said delaying retrofits could prove a false economy, with upgrades often easier and cheaper to deliver through planned maintenance and asset management programmes, than in anticipation of future regulatory or market pressures. For landlords, the question is becoming less about whether to invest and more about how best to future-proof their portfolios.
The trend is not limited to London added the bank. Investors with properties in Wales, 79%, Scotland, 78%, the West Midlands, 76%, and London, 75%, are likely to say renters are prepared to pay more for greener properties. Demand for stronger EPC ratings is particularly pronounced among investors with properties in the North East of England, 80%, the South West of England, 79%, and London, 77%. The findings point to a broader UK-wide shift: energy efficiency is becoming part of how tenants assess property quality across different regional markets, not just in the UK capital.
