Renters are advocating for eco-friendly modifications in properties, as reported by NatWest.
UK Renters Embrace Sustainability and Green Energy
A new study reveals a growing trend towards sustainability and energy efficiency in the UK's rental market. The research, conducted using the Greener Home Attitude tracker, sheds light on homebuyers' preferences and energy-saving improvements.
Renters' Preferences for Sustainability
The findings indicate that renters are increasingly valuing energy-efficient and well-designed rental properties. This preference is mirrored in the investment decisions of institutional landlords, with 88% of UK investors considering Environmental, Social, and Governance (ESG) factors essential for long-term investments[1].
The shift is partly driven by the emergence of younger and well-off renters, who prioritize flexible, sustainable, and well-managed rental properties[1].
Current State of Energy Efficiency and Property Conditions
Despite the growing emphasis on sustainability, rental properties generally lag behind owner-occupied homes in energy efficiency and affordability. The rental sector faces challenges related to the affordability crisis, with high rents and limited governmental action on mandatory improvements[3][5].
Compared to owner-occupied homes, rental properties have traditionally lower rates of energy efficiency improvements. However, new legislation and investor ESG commitments are beginning to address this disparity[1].
Summary
The report highlights several key aspects:
- Renters' sustainability views: Increasing preference for energy-efficient, well-designed rental homes; ESG factors vital to investors (88% consider ESG)[1].
- Rental market trends: Growth in private renting, especially among younger and well-off renters; rental demand remains strong but more measured[1][2][4].
- Energy efficiency gap: Rental homes generally less efficient than owner-occupied; upgrades hampered by split incentives and costs[1].
- Policy and investment impacts: Emerging legislation and increased institutional investment in ESG-driven rental portfolios encourage improvements[1].
- Affordability issues: High rents and energy costs strain tenants, highlighting the need for sustainable, affordable rental homes[3][5].
Barriers to Change
Many homeowners who are not planning to make changes cite the cost of work and disruption as the key barriers. However, initiatives like NatWest's Home Energy Hub aim to help homeowners understand, commission, and pay for necessary energy efficiency work.
Green Transition Concerns
Over half of the respondents feel that the UK government is moving too slowly to aid the green energy transition. The use of public transport has gained more traction, with 29% of respondents regularly using it in 2023, up from 25% in 2022. Additionally, the regular recycling of clothing, such as using Vinted or depop to buy and sell second-hand clothing, has also gained more traction, with 48% of respondents doing so in 2023, up from 46% in 2022.
In conclusion, UK renters show a growing interest in sustainable rental options, and institutional investors are responding strongly to ESG priorities. Despite this, rental properties still tend to be less energy efficient than owner-occupied homes, but evolving regulations and market trends are gradually improving this situation[1][3][5].
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