Nov

Tenants happy to pay 13% rent premium for green homes, says big landlord

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Renters are willing to pay a 13% premium for a low carbon property, according to new research from Legal & General.

Its survey found that buyers would fork out 10.5% more, with all consumers now rating homes that have energy efficient, sustainable features as more important than the size of the property. There has also been a 34% rise in searches for eco-friendly homes.

Almost two-thirds (62%) see more green investment in housing as an attractive or very attractive option to address the cost-of-living crisis. When asked why they would buy or rent a low-carbon home, 65% of those surveyed chose environmental factors such as reducing their carbon footprint or helping to prevent climate change, while 37% prioritised the cost savings from cheaper energy bills.

Legal & General says the figures indicate that greener residential buildings could generate higher purchase and rental premiums, which would represent a major turning point in the way residential housing is valued in the future.

Material difference

“Climate change and energy efficiency have risen right up the agenda for many people when choosing a home,” says John Alker, head of sustainability.

“With buyers and renters prepared to pay a 10.5% and 13% premium respectively, energy efficiency and sustainability in homes make a material difference to the consumer. This research helps cement the business case for investors and developers to invest in low carbon homes.

“It also shows that clarity is key when it comes to low carbon and energy efficiency. Energy Performance Certificates are not well understood – they need reforming to better reflect real world energy consumption and to help incentivise adoption of low-carbon technology.”

Read more about EPC upgrade costs.

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