Landlords in London committed to investing in energy efficiency

Landlords in London committed to investing in energy efficiency

Almost a quarter of landlords in London say they’re planning to spend between £100,000 and £200,000 to improve the energy efficiency of their portfolio according to new research* from relationship bank Handelsbanken.

By Handelsbanken

Polled for the bank’s second Professional Landlords Survey, 24% of them said they’re planning to spend the money to improve energy efficiency ratings of properties, with a 18% looking to spend between £200,000 and £500,000.

Nationally, most landlords plan to spend between £100,000 and £200,000.

With energy prices still volatile and the government’s energy price guarantee** rising to £3,000 in July, energy costs will factor into tenants’ calculations when deciding where to live, something that landlords will be mindful of. They may also be looking to get ahead of any future changes to the regulations and making the investment sooner rather than later.

Landlords in the survey had an average of 29 properties worth a value of £14 million and were drawn from across the UK. The survey found many landlords in London in bullish mood, with 77% planning to increase the size of their portfolio in the next year. 77% of these landlords were particularly interested in boosting the amount of student or house share accommodation they owned, while 71% were keen to invest more in commercial offices.

Nationally, over half (57%) of those looking to buy more properties also plan to diversify into new sectors, with offices (43%) attracting the most interest as investors.

The overwhelming majority of respondents (92%) expect the value of their portfolio to increase over the next 12 months, with 39% predicting it will grow by over 20%. Only 8% thought it would broadly stay the same.

The report highlights that professional property investors are cautiously optimistic and alert to opportunities but mindful of a sensitive market. Many are waiting for values to fall a little further, like for offices and commercial assets, (a general market prospect being forecast by the Bank).

Michelle Groome, Branch Manager at Handelsbanken Clapham said: “Energy prices are becoming a factor for tenants and this survey shows many landlords in London are alert to that and to the importance of future-proofing their properties as regulations look set to change around Energy Performance Certificates.

“Despite volatility in the property sector, it’s also encouraging to see that property investors in London are being pragmatic yet entrepreneurial. They are showing caution but are equally sensitive to the opportunities available in the current environment and are aware of the investment needed to make these energy
efficiency improvements.

Landlords were also asked which regions they think are the most attractive for property investors in the next 12 months. Naturally, London’s landlords thought their home region presented an attractive investment opportunity, with their second choice being the North West.

Michelle Groome emphasised the importance of seeking specialist advice if you’re thinking of investing in an area you are unfamiliar with: “As a local relationship bank, with branches in communities across the UK, we are close to our customers and have in-depth knowledge of their financial circumstances and needs and the local market in which they operate. We are therefore well placed to support our customers with their property investments and other financial needs for the short as well as long-term.”

At Handelsbanken we focus on building relationships with our customers therefore we can consider more when it comes to affordability such as:

• Complex income streams
• Directorships
• Rental incomes
• Additional securities

Do not hesitate to contact us on 020 7095 5030 if you are a property developer and want expert financial advice on the local area. To read further exclusive insights, download the Handelsbanken Professional Landlords Survey or check our website on