Sustainability is a major concern for Edinburgh’s tenants and landlords alike. With growing awareness of climate change and the need to protect the environment, many tenants are actively seeking rental properties that reflect their eco-conscious values – and landlords need to respond.
Making sustainable upgrades to your property can help attract these tenants and give you a head start on future legislative changes that will require homes to be more energy efficient. While the Scottish Government has shelved plans for a minimum EPC rating of C for all private rental properties by 2025, the 2045 net zero target means more demands will soon be made on anyone owning a rental property.
In November 2023, the Scottish Government launched a consultation on proposals to make new laws around the energy efficiency of homes and the way they are heated. Gas and oil boilers were a major focus because they are the third biggest contributor to greenhouse gases in Scotland, and changes are therefore needed to achieve a planned 75% reduction in emissions by 2030 and a 90% reduction by 2040.
In addition to making rental properties more attractive to eco-conscious tenants, green upgrades can benefit landlords too. Green energy sources can reduce maintenance issues such as boiler breakdowns. An energy-efficient property will also attract higher rent and will improve saleability further down the line.
Why Are Tenants More Eco-Conscious?
Growing concern over climate change and its impact is driving tenants to seek properties that reflect their commitment to sustainability and this is certainly true for younger tenants. Eco-conscious tenants want homes that reduce energy consumption, minimise environmental impact and help lower their carbon footprint. Rising energy costs have also made energy-efficient homes highly desirable as tenants can make significant savings on their utility bills.
For landlords, investing in green property upgrades provides an opportunity to target tenants with very specific demands. Energy efficiency and green credentials are likely to become even more desirable for rental properties in years to come, but these upgrades come at a cost. And while property owners who invest in upgrades can benefit from grants and discounts, the benefits need to be carefully weighed up.
Sustainable Upgrades – Options and Costs
There are many sustainable upgrades available to landlords, each offering different benefits and having varying cost implications. Government grants and loans are available for many projects that improve a property’s energy efficiency. However, many are only offered to homeowners whose properties are their main residence. Home Energy Scotland has further advice on loans and incentives for private landlords here.
The best place to start is by carrying out an energy audit of your property to see where improvements are needed and drawing up a list of the most practical and cost-effective options.
Solar Panels
Benefits: Solar panels generate renewable energy, reducing reliance on fossil fuels and lowering electricity bills for your tenants. They also increase your property’s Energy Performance Certificate (EPC) rating, making it more compliant with forthcoming legislation and more attractive to tenants.
Costs: Installing solar panels can cost upward of £5,000 depending on the size of property and type of installation. Long-term savings on energy bills can help offset the initial investment, although this is a benefit to the tenant rather than the landlord. However, landlords could be entitled to government grants towards clean energy systems. They may also be eligible for the Smart Export Guarantee (SEG), earning money by selling excess energy back to the grid.
Air and Ground Source Heat Pumps
Benefits: Heat pumps are an eco-friendly alternative to traditional gas boilers, providing efficient heating by extracting heat from the air or ground. They significantly reduce carbon emissions and improve energy efficiency.
Costs: Air source heat pumps cost upward of £5,000 while ground source heat pumps are considerably more expensive due to excavation needed for their installation. Both require outside space. Though the upfront costs are high, heat pumps can reduce heating bills by up to 40%, and government grant schemes offer up to £7,500 financial assistance.
Electric Car Charging Points
Benefits: With the rise in popularity of electric vehicles (EVs), tenants are increasingly looking for properties equipped with charging points. Installing an EV charger can make your rental more appealing to eco-conscious tenants while future-proofing your property.
Costs: The cost of installing a home charging point is around £1,000. Government grants are available, offering up to £400 towards installation, but these are targeted towards EV owners rather than the property itself.
Triple Glazing
Benefits: Triple glazing enhances insulation by reducing heat loss through windows, leading to lower energy bills and improved comfort for tenants. It also reduces noise pollution, which is particularly beneficial for properties located in busy areas of Edinburgh.
Costs: The cost of triple glazing depends on the size and number of windows. While it’s a more expensive option than double glazing, the long-term energy savings and improved EPC rating can make it a worthwhile investment, especially if windows already need replacing.
Loft and Cavity Wall Insulation
Benefits: Insulating the loft and cavity walls is one of the most cost-effective ways to improve a property’s energy efficiency. It prevents heat loss, reduces heating bills, and enhances the overall comfort of the home.
Costs: Loft and cavity wall insulation cost in the region of £500 to £1,500, again depending on the size of property. These relatively low-cost upgrades offer immediate savings on energy bills and will make the property more attractive to those looking for a good EPC rating.
Future Legislative Changes
The Scottish Government has been ramping up efforts to increase energy efficiency in the private rented sector in recent years to improve the quality of homes for tenants, and more legislation is anticipated with the drive towards net zero in 2045.
By upgrading your rental property’s energy efficiency now, you can avoid future compliance issues and get ahead of the game as new legislation is introduced.
Making your rental property more sustainable helps reduce carbon emissions and contributes to the fight against climate change. It also ensures that your property is future-proofed, with energy-efficient homes more likely to retain value over time.
Home Energy Scotland offers a variety of grants and loans to homeowners for installing clean energy systems or improving energy efficiency, although most are only accessible to those who live in their properties.
With almost 20 years’ experience in the city’s private rented sector, Clan Gordon can offer advice about the benefits and cost-effectiveness of green property upgrades in your buy-to-let property. Schedule a call with our Business Development Manager to find out more.