New Energy Efficiency Rules Boosting Demand for New Builds
Investing in new-build property has traditionally been a popular form of property investment due to the range of benefits it can offer – this has seen many investors purchase off-plan (before the house is completed) as a means of maximising their potential gains.
The push towards making homes energy efficient in recent years has heightened the incentive to invest in new-build property, as tenants wish to keep their energy bills down.
In turn, new-build properties also tend to boast higher EPC (energy performance certificate) ratings of an A or B compared to the current UK housing stock which averages out at an D.
With recent government regulations expected to make all homes in the private rented sector a C rating minimum, it can be said that new-build investors will save significant figures by not having to perform extensive maintenance to boost ratings.
Around 72% of renters aged 18 to 34 check the energy rating of a home before renting, with many adding that they would not choose to live in a property with a rating of D or below.
This will ensure that demand for new-build housing will remain high for the foreseeable future as it is more likely that young renters will prioritise such properties over older housing.
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Green New Deal
The All Parliamentary Group on the Green New Deal is a cross-party platform made up of MP’s and Lords from UK Parliament.
The Green New Deal defines its mission as a “framework for a practical plan for tackling the interlinked climate and nature crises” that aims to “deliver an environmental transformation of our society and economy catalysed by public investment.”
In its most recent report, it has laid out plans for a vigorous top-down approach to tackle environmental issues and spearhead the UK towards its established net-zero deadlines.
One notable point in the report has been that of enforcing a mortgage penalty for landlords whose homes don’t meet specific EPC ratings.
With a 1% surplus being suggested alongside a three-year timeframe to implement any upgrades, it is no wonder that landlords should be drawn to new-build investments where the vast majority of such properties already meet the proposed new energy standards.
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Why New Build?
As mentioned, investing in new builds will be more cost-efficient in the long term amidst changing regulations around energy usage.
On top of this, new-build properties are also more likely to boast more modern eco-friendly design and features, which will put them in greater demand and gives investors the ability to generate higher rental prices.
One study has shown an impressive 90% of those within the Gen Z age bracket are happier to pay up to 10% higher for a product that is eco-friendly, which new-build landlords should be keen to capitalise on.
New-build properties in up-and-coming areas may also be subject to significant levels of capital appreciation over time as the area becomes increasingly popular and property prices rise.
Ultimately, investors considering new-build or off-plan properties will find themselves in a much more secure condition as it should become increasingly easier to obtain a buy-to-let mortgage whilst saving on costs.
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Thinking about investing in new build or off-plan property? At RWInvest, we pride ourselves on 18 years of industry experience and enjoy a vast portfolio of successfully completed developments.
Its essential not to miss out so contact one of our friendly sales consultants today who will be happy to assist you on any stage of your property investment journey.